Well, I personally prefer the Galaxy S, but as far as I know, both handsets are equally matched in terms of hardware specifications, with the Nexus taking a slight lead in the software department by virtue of its running an unskinned version of Android.
Here are the pros of the Galaxy S, as opposed to the Nexus S:
1.) Better Bluetooth tech (3.0 vs 2.1)
2.) 720p video recording (The Nexus S can only do D1 recording, which has a resolution of 720x486, or so)
3.) Better camera stills (I think the sensor is different, though that's just a guess).
4.) Slimmer and lighter. Actually, I prefer a somewhat heftier phone, so mark this down as a tie for me.
5.) SD Card Slot. The Galaxy comes in either 8 or 16GB, while the Nexus only has a 16GB version. However, if you buy an SD card, you can bump up the storage on the Galaxy S to 48GB flash memory.
6.) Sure to get Super AMOLED tech; Some variants of the Nexus S use Super LCD technology instead, depending on your region.
Pros of the Nexus S, as opposed to the Galaxy S:
1.) Stock Android, which is much easier to use than TouchWIZ (in my opinion, at least).
2.) Sure to get updates ahead of most other Android phones.
3.) Curved "Contour" Display, which actually feels rather nice on the face. Another upside to that is that it doesn't much hinder usability.
4.) NFC Chip embedded; While some features of the Nexus can be ported over to the Galaxy by means of a Custom ROM, you can't exactly install an NFC chip into it
[Not that I've tried, mind you.]
Both phones have a Wolfson DAC, so the sound quality is great for a mobile phone. However, the Galaxy can utilize the Voodoo Sound App that optimizes use of the DAC. The CPU/GPU combo is the same as well [Hummingbird], which is good for practically any Android app save for really high-end games.
With regard to that last bit, why not go for a dual-core phone on contract? Dual core tech may be overkill for most Android apps, but it's futureproofed, to say the least. Then again, things are fluid enough on a single-core 1GHz, so that's for you to decide.
Hope I clarified more than I confused.