HD if you want to root it or think you might want to root it in future: the S is (so far, anyway) unrootable. Actually, if you want to root it don't reward HTCs antisocial behaviour and buy your phone from someone else altogether. Sony Ericsson have recently changed their dev-unfriendly policy and now allow the bootlaoder to be flashed: the LG Optimus 2X is also reportedly quite easy to root.
I got a Desire S a few weeks ago and I haven't been disappointed. I looked at the Desire HD and thought that it was just too big for a phone. The Desire S is very snappy, has a great screen, battery life is decent - it will last a full day of heavy use and two days of normal use, the build quality is excellent, and it is nice and slim. Highly recommended.
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