The fact is I don't care which game is better, I'm just a victim of availability. For example, I own a PS2 and are about 80% done with GT4, by for the last 4 weeks my friend let me borrow Forza and his XBOX while he was moving.
I played Forza to about level 32 and realized that while its a good racer it has its flaws, like GT4. It seems the interface in Forza has some interesting bugs, including the lack of being able to tune cars before a race, or qualify so you can warm up for each race. It seems Forza requires you to adapt almost instatly to every car and track, and it requires that you set up your car with a uber setting, that can handle anything.
But GT4 isn't exactly better. The lack of any variety in customizing your car in GT4 makes it more bland. It seems that in GT4 every car is the same, at least until you get on the track. The lack of any body mods or paint change makes everything very dull, as some cars are limited in color selection.
Forza on the other hand has a very big problem with actually understanding tuning physics, and it's much harder to actually test out your tunes in Forza. GT4 on the other hand limits your tuning, but also lets you understand what is going on by allowing bigger steps in adjusting let's say suspension settings, especially the anti-roll bar and bound/rebound settings. It also allows to adjust TCS, which, contrary to popular belief is very important in racing, especially for race cars.
Forza however has a very cool telemetry engine, which if the casual player was a mechanic, would help out tunning, but alas we are not all created equal.
In conclusion, because this is taking too much of my precious time, neither game can be called the best racing game, because neither of them actually achieve something close to perfection, they both fall short of expectations and require the users to spend too much time playing them.