I actually prefer the 3rd gen's interior styling...which was dated compared to today, but the layout was less gimmicky than 4th gen.
Now, as far as body panels, you may be right, but where it counts, the 4th gen is better, such as crash protection or the significantly stronger frame. Body panels of modern cars are thinner feeling, probably to reduce weight (and thus improve fuel economy). However, thinness no longer means cheap because modern materials may just be as strong but thinner. For example, a modern body may have high-tensile steel which is thinner but stronger than old-style steel.
The 3rd gen's frame is still fully boxed except for the last couple feet so it's still much stronger than most trucks in it's class, but point taken. I honestly don't believe that manufacturers actually use high-tensile strength steel for the vast majority of modern body panels. I think they're just thinner. Cars today dent so easy, it can't possibly be stronger. Crash protection today is all about crumple zones, but I'd really like to see how a Yaris would stack up against a 40 yr old Buick. I know what I'd bet my $$ on surviving.
4.0 V6 teething issues were no different than head gasket issue with 3.4L V6 in 1996 3rd gen 4runners. Weren't the rear coils bad in 1996-1999 4runners, causing insane sagging???
I still have yet to hear of anyone's '96 having head gasket issues whether they had the recall done or not. I think at the time Toyota got so much shit for the 3.0's HG issues that they went overboard to prevent that ever being an issue on the 3.4. No proof though, just my speculation. I do think the 4.0 is a great motor though and apples to apples, it is a step above the 3.4 - now in 2010 anyways.
As for quality, i would like to see some solid proof to back up 3rd gen over 4th gen. Didn't JohnsD90 have multiple issues with his 3rd gen??