Both the S4 and 335i are mid way cars. Handling for both are not bad but not great. S4 is definately better where cornering and traction is concerned. Power down, the 335 plants its power down better due to less loss from the drivetrain.
Owenership, both are gonna set you back more than any normal run of the mill A4 or 325 since they're running hotter and more aggresively in terms of engine tune. Liveability, Audi is always best known for their interior quality. Exterior, very subjective. These points was recently commented by a buddy that owns both and S5 and the 335 and very recently the 1M.
In terms of buying, why not just go for an M3 or RS4? Not an S5, looks nice but not the best example of Audi's success.