Graphically it's "better" by far. Crew Management it's better (kind of, I liked having to pick crew well in SH3, just not having to drag them all around every few minutes). Map tools it's better. UI it's slightly better.
But for me, the gameplay of SH3 is far better at this point. I'm not entirely sure why, but even with lesser graphics and a few missing features I enjoy SH3 more slightly. I think GWX is probably a lot of that though. And the fact that I enjoy the Uboat war more than the US sub war.
One small that that I can't seem to get to work right with SH4 is opening tubes. In SH3 I was always able to switch to the interior view, head to the weapons guy and actually flip the torpedo tube doors open from there. That was really cool.
Can't seem to do that in SH4. Gameplay wise I can, but not in the new super duper 3D interior. *shrug*
Maybe when a fully supported Atlantic campaign with type VII boats comes out I'll be truely happy with SH4, but as it is now, not so much.