At sufficient high bitrates (generally considered > 256 kbps), both are "good enough". At lower bitrates, ac3 may be better.
An important consideration when encoding for DVD video, is that there is a problem in the combination of dvdauthor (through version 0.6.10) and some hardware players, causing the video and/or audio to pause momentarily at chapter boundaries. If you encode in ac3 and see such pauses it may help to encode the audio to mp2 instead.
The ffmpeg mp2 encoder is ehrm... minimalistic, it may not be sufficient for the audio purists.
The ac3 encoder in ffmpeg is very good even at 192 kbps.
If you want real good mp2 sound you can use mp2enc in combination with ffmpeg video encoding / export profile, but be sure to specify output sample rate = 48 Khz, this is a flaw in the mp2enc export module
Also note that non-US hardware players are required to play mp2 audio as well as ac3 audio while US players are only required to play ac3 audio. So be careful.
I have noticed that when I am creating a dvd from source files created by different people the sound level can vary wildly from one file to another. I wonder if there is a tool for normalizing sound levels across multiple ac3 and mp2 files?