I just did a test drive on both the '07 Navigator and the '07 Escalade. The BIG difference was the motor and the instrument electronics. The Escalade's ride was very nice as was the handling. The seats in the Navigator were a bit better, as was the 3rd row seating but I saw a drop off in the engineers to incorporate the electronics the way Escalade did. I now own the Escalade. The styling was the major factor in my decision. The Navigator was a bit cheaper even with the options packages. I'm not buying the Escalade for gas savings, but it's nice to know you can use regular gas when it's crunch time!
The instrument panel, the navigation system and sound package, and that motor. The exterior styling is the key!
The third row seating needs to fold flat into the floor and possibly be power driven.