This is a great discussion, here is how I see it.
The guys at thirdgen.org covered brakes easily. I'm going with a 13" C4 set. Just cut some ears off of the spindles, bolt up the adapter, machine the hubs, and you're pretty much done. There are kits for C5, 12" C4, LS1, and I think a Wilwood kit is in the works. These kits are cheaper than Baer's, but so far there is no Porsche kit... maybe 1 day there will be.
I read that a thirdgen will turn in a little better, but I don't remember the reason. I think I read it in a book that covers '82 to '98 f-bodies, that'll give you a rough estimate as to when the book was written.
Fourth gens might have more shock/spring options up front but the rears are the same. It's a million times easier (cheaper) to get big rims to fit a fouth gen. I don't want to use 2" spacers for this.
Like it was said before, half of the engine bay is covered by the dash in a fourth gen. Thrid gens are easier to work on under the hood, but still not as easy as other cars. T5 vs T56... if you have a 9 bolt like me there are no options for a good diff. Let's not forget the power advantage of the LT1 and LS1. I think a thrid gen may be easier to drive since it's easier to see out the windshield, but I've never driven a fourth gen so I can be wrong. Fourth gens are also supposed to have a better ride quality to them.
Also, the whole self destructing bearing hub isn't an issue with third gens!!
I think similar set up cars can run pretty close lap times, assuming the power difference is addressed first.
Keith, even swap your car for mine?