I'm not a fan of TouchWiz UI either (looks like it's trying too hard to be an iPhone), but the hardware/specs on the Galaxy S beats the Desire by a little bit.
With rooting/custom roms, I think the UI argument goes out the window, since you can pretty much put whatever you want on most phones.
I have the Desire and I'm loving it (
this guy updates his rom literally every few days, so it's been a lot of fun flashing and trying out new stuff.
Given the choice, though, I'd get the Galaxy S and put Modaco or something on it.