Depends what you want from a town.
Both towns are well established but in a state of transition. There are big plans to transform the old shopping centre in Dundrum so as to link it with the new town cente. I believe there are also plans to turn the main street into a more "traditional" type place that might make it more appealing (i wouldn't agree there's any "village" feel to it at present).
The place is also bceoing more commercialised with major office blocks both already constructed and planned. It's likely to become a more advanced hub for business development.
If schools are important, I don't think Dundrum is a runner. The main primary, Holy Cross, has an indifferent (at best) reuptation. Stillorgan definitely wins this category with a number of good schools either in Stillorgan itself or the adjacent Kilmacud.
As regards development in Stillorgan, there have been various plans to rebuild the existing shopping centre which has looked tired for a long time. There seems to be some debate about how viable any development would be given the development already in place in Dundrum. I understand that three of the four corners of the "bowling alley" junction are in single ownership and that it's planned to devlop them in unison.
For me, the big plusses in Dundrum are the Luas and the Town Centre. Anywhere within a reasonable walk of both would be good.
For schools, it would have to be Stillorgan.