ZippyRedPlumber

Capacity wise, the 7800 probably is better but also quite a challenge to program to get the capacity out of it, as far as I can tell. The XEGS equals 65XE which itself is a barely retouched 800XL which is a slightly updated 800 from 1979. Game library wise, the XEGS should be able to loads more than the 7800 thanks to that 8-bit computer background compatibility.

It depends on your definition of "better".  Want 2600 compatibility?  7800.  Largest library of games written to its strengths?  XEGS  Best graphic capabilities?  7800.  Best sound?  XEGS  Cheaper on today's market?  7800.  Expandability?  XEGS. 

And on and on.