I prefer the Analog... That's because I felt very much under control and comfortable with them. Originally, I played or drive using a D-Pad but then after playing the GT4 for the first time, I suddenly realised how difficult it is to drive with a D-Pad. For example, accelerate using the X button is very unforgiving especially with the traction control off, you tap it and wheelspin all the way.
So after only months of practice, I got used to it and I can steer and accelerate much better!
EDIT: Actually I can drive better in a wheel... But sadly I don't own one.