This is really an easy choice...it all depends on your wallet and your willingness to pay extra for a small improvement.
Is the 987 ('05-'08...the '09-'11 is considerably different in engine design) better than the 986 ('97-'04) ? Yes. Read the reviews of the '05 987 and you'll see the reviewers listing the differences and praising them.
Do you like the styling of the 987 or the 986? Some do, some don't.
Do you need the extra cockpit room?
Are you willing to spend the extra money for the 987 versus the 986?
Only you can answer these questions.
I don't buy the most expensive wine. I'm willing to spend considerably less to get what I consider to be 90-95% of the "goodness". But are you?
And then things get even more different and better with the introduction of the 981 and 981S in '12.
You are lucky if you get to make the choice.