Really I feel like Graces has the better content and battle system but my opinion might be in the minority. The character chemistry is also better in graces too. However Xillia is still a great game and has a better story than graces.
I liked Graces, and I found Xillia to be inadequate and worse than Graces in a lot of ways. The gps map is a lot like in ff13, the towns are lackluster, the story is one of the worst in the franchise, sub par VA, monotonous dungeons and overworld. The combat in Xillia is really cool, and frankly gamechanger for the series, but that's it, the rest is pretty trash imo.