I've owned a Td5 and a 300Tdi back to back and I have to say there was a huge leap forward in refinement when they brought out the Td5.
However, while the engine is as tough as a Tdi, there are quite a few issues that need to be addressed to make it reliable. The injector loom leaks engine oil into the ECU- the cause is an o-ring in the loom connector but ideally the injector loom should be replaced with a new OEM one. The injector seals should be replaced every 150k miles or so. The exhaust manifold warps and can snap the manifold bolts - simply remove the manifold heat shield to prevent this, no need to remove the manifold webbing which simply makes the manifold weaker and more susceptible to warping. The fuel line at the tank end can chaff against the chassis and leak, The hydraulic anti roll bars leak along with the pipes corroding - most people rip it off and put conventional antiroll bars on. D2 rear chassis can corrode and need replacement - there doesn't seem to be a pattern as to 'good years' despite what you might read. PAS boxes leak like any other landy. Wheel bearings are part of the hub - you need to change the hub if a bearing wears and its expensive. The extent of computer control in a Td5 is mad - want electric heated seats? They bolt in ok and the wiring is usually there, but you need to program the body ECU to enable them. Ditto spot/fog lamps and heated front screen...
Having said that, the Td5 is easy to tune, and a good remap (Alive Tuning in my case) transforms the truck from a lumbering stodgy beast into something that is surprisingly sprightly. Economy wise my 300Tdi is returning around 30mpg but the Td5 struggled to better 25 - BUT it was heavily modified and had 265 BFG ATs which weigh a ton! Without te mods I'd say she should have been getting closer to 28mpg, so there is a difference but not a huge one. Some Td5 owners report 30-32 averages, so who knows what you might get.
The interiors are almost identical up front spacewise. I reckon there is a tad more rear legroom in a Tdi (and the doors open MUCH wider than a Td5 rear pass door which is quite limited in its opening). But the boot is far smaller in a Tdi which could be a problem if you do a lot of camping as we do - we're having to reorganise everything as we can't get out big fridge in the back without entirely filling the boot lol.
The Tdi is obviously slower, but its a much simpler truck to fix, parts are cheaper as they are common to the RRC and 90/110 in the main. The only bugbear in a Tdi is rust. If you can get rid of the rust and keep it generally rust free, then its a much easier truck to live with IMHO. No ECUs (in the manual - the auto has an engine ECU sadly but you can convert it to be ECU free) which makes it potentially the easiest to fix at the roadside and the easiest to diagnose.
What would I recommend? A Tdi with a D2 body lol. When my Tdi body rots out, thats what I'm planning on doing

HTH