Both generations have their good points. We are up to the 9th generation of Corollas - 1998-2002 are 8th and 2003+ are 9th gen.
I agree that the body cladding can get out of control - but nowhere near where other cars tread, ie. late 90's Pontiac Bonneville - enough plastic scoops, louvers, strakes, and spoilers to build enough car out of. I'm not 100% sure with the 9th gen S models - but I'm pretty sure that the spoiler is a dealer installed option.
Things I like about the 8th gen.
- sleeker body style, IMO
- more leg room
- more elaborate suspension (multi-link rear)
Things I like about the 9th gen.
- bit more power, seems to get better fuel economy than previous generation
- longer wheelbase, slightly bigger car
- cabin air filter (good for people woth allergies)
- better aftermarket support
- coulda had a XRS
Things I don't like about the 8th gen.
- first introduction of 1ZZFE engine
- lots of emission related problems
- oil consumption issues with earlier engine
Things I don't like about the 9th gen.
- supposed to be fresh design and appeal to younger market (looks like a 3/4 scale Camry)
- dropped the multilink for beam axle (had to cut costs somewhere)
- problems with cold start/fuel issues
- poor driving position, seems short on headroom