I tried the Microsoft Sidewinder Force Feedback Wheel several times, before and after getting my first Logitech Wingman Formula Force. The Sidewinder seems to be the most readily available FF wheel; it's everywhere, including retail stores like Best Buy and CompUSA.
Unfortunately I really did not like the Microsoft wheel. Compared with the Logitech, it has far too much damping force when making rapid, large corrections, and it seems to use a great deal of CPU power. Although it can generate a lot of force, the MS wheel doesn't seem to convey the useful forces very well, like the differential in force when the front tires start to break loose, or the castering forces from the front tires when the tail starts to come around.
Also, the MS wheel has a notchy, grindy feel, and noticeable slop when transitioning from one side to the other, and generally looks and feels to be of somewhat lower quality than the Logitech. It also has an enormous power transformer that has the plugs attached to it, so it has to hang on the wall or eat up room on the power strip. By contrast, the Logitech's power transformer has a cord on each end, so it can tuck out of the way on the floor in a civilized fashion.
The MS pedals are better than the Logitech's, but I'm using my CH Pedals with the Logitech. I can't seem to get the MS wheel to work with CH Pedals, but the Logitech coexists with them just fine.
According to some testing I've learned of, the MS FF wheel takes about 4 million CPU instructions per force instruction, while the Logitech FF wheel takes only about 30,000. This suggests that the MS wheel is always going to have relatively high CPU overhead and high latency compared with the Logitech.
I'm not inclined to do too much further experimentation with the Microsoft wheel. It seems to me that the Logitech people really nailed certain critical design parameters, and effected a really good implementation as well, whereas Microsoft went the wrong way on the same design decisions. In my opinion, the choice to go with gears rather than cables for force transmission and the choice of MIDI/game port over USB/serial port were both poor decisions.
The fact that Microsoft doesn't allow you to turn off the artificial electronically induced damping in the Sidewinder driver says to me that they simply aren't interested in supporting serious vehicle dynamics simulations. This wheel may be fine for the likes of Midtown Madness and Monster Truck Madness 2, but I just don't think it's designed for a simulation of the caliber of GPL.
Since the cost of the two units is very close, I can't see any reason not to go with the Logitech, particularly for anyone who already has a decent set of pedals. (See my update below.) The only downside, aside from the pedals, is that the Logitech seems to be carried by relatively few retailers, while the Microsoft wheel seems to be everywhere. However, I got my Logitech for only $133 plus shipping through Best Bargains.com, which compares very favorably with the prices I saw for the Microsoft wheel in stores. The difference would almost cover the cost of a set of CH Pedals.
Update: A number of people have responded to my comments above. Several have said that they like the Microsoft wheel a lot and that it works great for them.
I've summarized my own experiences and opinion above, but you may find that your experience with the MS FF wheel differs and that it may work quite well for you.
The MS wheel's optical sensor is almost certain to outlast the Logitech's steering pot. After removing the cover of the Logitech wheel, I've realized that replacing the pot may be a real bear. This is a consideration if you use your wheel a lot.
While I was visiting at Papyrus, I tried the MS FF wheel that Dave Kaemmer has been using. I found it to be noticeably better than my own, mostly because it seemed to have less friction. I don't know if this is due to production variations, or due to the fact that his has gotten more use and has possibly "worn in".
An interesting fact, however, is that Dave appears to have given up his joystick - which he used exclusively for all racing simulations for a very long time - in favor of the MS FF wheel.
As of September 2000, Wolfgang Woeger - one of the world's fastest GPL drivers - has also given up his famous joystick in favor of a Microsoft Force Feedback wheel. Here's what he says:
"I am sure it will not make me faster but as you say, I am looking for realism. I was fast long enough; it's not all that I want. :-)
"I drive 1:29 in the Honda at Monza, the feeling is soooooooo nice, for me it's like GPL 2 now. <G>"