I had an 03 with Paxton, and traded up to an 09.
The Paxton made the 03 great fun to drive, but not as much faster than you would think. It tended to overpower the chassis, brakes, transmission, rear end, and was difficult, and a bit dangerous to drive at it's limit.
At the drag strip it overpowered the traction available, and did not give as much increase in ET as you would suppose. Around town it would also break traction and got more dangerous as the revs increased.
Don't get me wrong, it was fantastic fun to drive, but it was obvious that getting 800 hp out of a car designed for 500 was a handfull.
Same thing at the road course. While you could blast by people on the straights, you still had the same brakes and suspension to get yourself around the next corner, and you tended to be forced to keep gathering it up as you tried to scrub off the speed you got on the straights.
The 09 (Gen IV) is a whole nother driving experience. The engine makes +600 hp now, but the rear end set up allows it to hook up much better to smoothly drive you off the corner. The transmission shifts much easier and handles the power better. The engine cooling is no more a matter, the brakes seem more up to the task, and the upgraded clutch holds all the power easily, while still giving a easy to modulate feeling and is easier to push.
The Gen IV is a much better integrated package. Where in the Gen III the power flattens out drastically in the upper ranges, the Gen IV begins to pull harder and harder to the higher rev limit. It feels like rocket boost and the suspension and drive line feel very happy with the additional power.
The Gen IV is also smoother riding, and has a better integrated chassis. Just feels like it is built better. The elimination of the heavy exhaust cross over from the III makes the Gen IV lighter, much cooler inside and better sounding.
I believe it is a better car in most regards, however it does not take to forced induction as well as the III. Latest trend for those looking for additional performance from the IV is to add the composite intake and improved cam shaft from the latest Gen V. This will give you closer to the 640 HP of the Gen V, but still have all the reliability and drivability of a naturally aspirated V-10.
Gen IV uses essentially the same engine as the new Gen V. The Gen V engine is a better developed version of the Gen IV, so the Gen IV engines may well benefit from further Viper development for that engine in upcoming years.
The Gen IV's currently command a premium price, being an advanced development of the Viper concept. Do not believe you can turn a Gen III into a better overall package for the current difference in prices.
Gen IV has significant improvements in Engine, transmission, tire technology, brakes, suspension, rear end, cooling, advanced computer controller, intake, exhaust, aeordynamics, hood reduces lift, etc...