Different strokes. It's difficult for me to think FFT is the more challenging game since I've played it dozens of times by now and now its ends and outs. I think TO is definitely more challenging now, but that might only be because I'm not familiar with it.
I like TO's story a lot, although that's not why I would ever recommend a game over another. Smith's translation in TO is amazing where FFT seems to be trying to mimic it. But that being said, I really couldn't care less about the story. I come for the gameplay and for me TO is the best available, followed by FFT.
The original version of TO was much harder due to the lack of the Wheel of Fortune mechanic and instant permadeath for most of the game. The latter part of the game is probably slightly harder since they severely debuffed the swordmaster class which used to be super broken. Still, there aren't really any maps that match the difficulty of the
Wiegraf
Also they buffed the hell out of Canopus on the PSP. He's TO's Orlandu now.