I am probably one of the few people reading this forum that actually cross shopped these very two cars. Last fall I was shopping for a new car, I considered the STI, the EVO, the SRT4, and the Mustang and much to my own surprise and all of my friends dismay, I ended up with the Mustang. There are many reasons for this, but a little of my background is important.
I now call myself a "reformed car snob", I must admit I've been a Stang hater for over 15 years now. This stems back to when I was in high school in the late 80s and Mustang 5.0's were everywhere and everyone who had one thought they were the *****. I considered myself a non-conformist and smarter than the average redneck in the small county high school I went to in NC, so therefor I must have better taste in a cars and developed a respect for the Japanese approach of higher tech performance cars. Over the past 16 years I've owned 20 cars, the vast majority of which were imports. Toyotas, Nissans, Mitsubishis, and Subarus. I just sold my last Toyota last 2 weeks ago ('91 MR2 turbo). And now I just have the Mustang, hard for even me to believe.

Anyway, when I started looking for a car last year, the EVO and STI had just come out. In the past 5 years I've owned 3 DSMs, for those that don't know DSMs are the spiritual predecessor to the EVO, AWD turbo with similar drivetrain to the EVO with a different body and suspension. I also owned a WRX, bought one when they first came out in Mar '01. My roomate has a very well prepped WRX and his girlfriend has the WRX STI. I've been an autocrosser for 7 years so I've driven the wheels off all these cars and have wrung them out thoroughly. I've also drag raced these cars at least a few times. So I think I am qualified to share my opinion.

So how did I end up with a Mustang?? Thats a good question.
Firstly, whilst small high tech powerplants can certainly make gobs of power, compromises must always be made to make that power without displacement. By the way, noone should have any doubt about the 4G63 in the EVO, it is a tried and true powerplant that is incredibly stout and can make alot of horsepower reliably for a long long time. However the big advantage to the Mustang here is power delivery. After years of driving turbo cars, I've just grown tired of them. Off boost they are miserable and if you wanna get any kind of decent gas mileage, you must drive somewhat off boost alot of the time. In the summer heat with the A/C on, the jerky slow response of a turbo engine off boost is just simply a PIA. On the autocross course, turbos are also a PIA, they weren't soo bad with the AWD cars, but with RWD like in the MR2 turbo, it was horrible, combine that with the mid-engined configuration and it made one heck of a handfull to keep the car pointed somewhat straight. Don't get me wrong, when driven properly, the MR2 could run mmmmmuuuuucccch faster through the cones than the Mustang, it was just a hair raising experience. With the Mustang, I'm learning what a joy it is that the throttle pedal can be integrated as part of the handling input on the car. The smooth, even, predictible, power delivery is quite a beautiful thing.
Secondly, it sounds beautiful. The first thing I did after buying the Mustang was put on a Magnaflow catted x and cat back and the sound is awe inspiring. It is a simple pleasure just to start the car everyday and hear that little rev it makes befor settling into idle. I used to scoff Mustang guys for reving their motors all the time, now I'm one of them. You just can help yourself.

The next best thing I've owned was the I6 in the Supras, they have a very silky smooth, mellow exhaust note that was also pleasureful, but doesn't really compare. The H4 in the WRX sounded pretty good also, very harleyesque. But I4s just plain sound lame, I'm sorry, but that is my conclusion after many years of driving them. I've always been secretly envious of the sounds coming from Mustangs, but when the modular motor came out in the 90s, I just don't think anything matches that sound.
Thirdly, price. I realized a long time ago, even though I do autocross primarily. Straight line performance is still the most important performance aspect to me because I drive my cars daily also. Exceptional handling is nice, but not something I can safely use on my daily commute whereas power is something that can always be used, at least for 5.4 seconds at a time.

So "bang for buck" was important. I also didn't want to mod the heck out of a brand new car. So "stock" performance was most important. Even though the MSRP of the Mustang is nearly the same as a WRX, who pays MSRP for a Mustang?

I was able to get it for $5K off MSRP, not something I could do with a WRX making it several thousand cheaper and in most situation quicker. I considered the EVO and STI which are moderatley quicker, but cost at least 45% more realistically. I also thought about a Mach 1 or Cobra, but decided since I hadn't had a Mustang before and I might potentially trade it for an '05+ Mustang, I'd save my $$ and get the GT for now. The SRT4 met the "bang for buck" goals, but I just can't stomach FWD anymore. All other choices in the price range are simply underpowered.
Finally handling, This is were the Mustang basically loses, but I don't think anyone will deny that. It is not nearly as bad as I had imagined however. Its constant steady state grip is not bad at all. Freeway on/off ramps the Mustang holds its own ok. Of course I immeddiatley put better tires, springs, shocks, camber plates on it, and those helped alot. Its heavy transitional stuff where the live axle and poor front suspension design rears its ugly head. It is my argument though that these things don't really matter much on a street driven car. They hurt in the autocross course alot, but don't make the street driving experience much less enjoyable. I don't drive around many slaloms on my daily commute.

I just consider these limitations a challenge at the autocross course. I run in a class with WRXs and feel pretty good about running with them if I can manage to keep up, it shows that I'm a better driver. I have considered running up a huge credit card bill at Maximum Motorsporst, but think I'll instead save my pennies and trade the '03 GT in on an '05 or '06 either GT or maybe some higher end special model with IRS.
So in conclusion, after years of chasing (and sometimes beating) Mustangs I have come full circle. I am now a lover. The car provides simple pleasures everyday that just suite me better than all the high-tech crap. Plus I feel better about myself for buying American. All the things that are wrong with the car are much easier to forget about than I thought they would be, all I need to do is floor the acellerator and I forget all about those little things.
Wow!! I'm long winded, I hope someone finds this informative...