I like both factions. Both have their own cool things, but I favour the Alliance just a teeny bit more. The Alliance is more tightly knit than the Horde. Most of the races in it have been allied with eachother for a hell of a long time, and even though the Night Elves are fairly new to the group, they're becoming more intergrated into Alliance society. The same can't really be said for the Draenei though, who were pretty close to leaving Azeroth behind until Velen decided to stay. There's so much lore surrounding the Alliance races! While it can be said that there is a lot of lore for the Horde races too, I think that they haven't had as much of a background story (excluding the Orcs, Forsaken and the Blood Elves, who were once Alliance anyway). Alliance settlements seem more organised than that of the Horde, but seeing as the Horde is meant to be "noble savages", my preference for Alliance cities/towns is completely based on my opinion. And, not forgetting, human racial > all for PvP.
The Horde on the other hand as cooler races overall. My all time favourites are the Undead, Blood Elves, Trolls and the Night Elves from the Alliance. The Elves because, well, they're freaking elves! The trolls because they're pretty cool and because they seem out of place with the rest of the troll civilizations. The Undead are awesome 'cause of their background (which I guess could count as Horde and Alliance lore + coolness).