I just bought an '04 Escalade. The three vehicles I was choosing between were the Z71 Tahoe, the Denali, and the 'Lade.
I liked small bits of each one. I really liked the fact that you could turn the dammed 4wd on or off on the 'Hoe, and it really pisses me off that you cant in the other two.
I really think I liked the looks the best of the Denali. Its just sort of the most "me" out of the group. I really like the grey "carbon fiberish" trim on the inside (except the fact that it was peeling and scratched in most every one I test drove)
In the end, the wife liked the Escalade the best. And it is her DD anyway, so get her what she wants right?
I dont think you can go wrong on either. And to the 6.0 not being that much more than the 5.3 comment... I have driven a ton of 5.3s, and the 6.0 in my Escalade, and in the in-laws '07 Tahoe will both flat walk the dog, and according to the instant MPG on the info screen, getting 22 mpg HWY. I will take that.
If you have 30 grand, and dont mind not having AWD, I would go for an '06 Escalade 2wd.
6.0 2WD? Oh hell yeah....