IMHO, the only real improvement that the Warlords Edition has over the original red box 1.12 version -- and I realize that at least a few people here would dispute even that -- is that building costs and build times have been halved, which obviously helps to quicken the game's pace.

That aside, however, I would still favor the original STW over WE. As Wilbo and Cynwulf already pointed out, it's better balanced. While units like Kensai and Battlefield Ninja are undeniably fun to play with, they really knock the rock-paper-scissors system off-kilter (to say nothing of being unhistorical "fantasy" units).