hey I have returned from exile.
Gyarados or Milotic?
I prefer Gyarados because I have more experience with the brute than the beauty.
Milotic has been ridiculously hard to obtain in past and that alone puts me off a bit. I think the only time I've actually used Milotic was in rental Battle Tower. It was good and every single Milotic I've faced has been a challenge (Cynthia...) but it doesn't play to my strategy as well as Gyarados. I usually go for offensive power rather than defensive, water types I feel suit the role of an attacker far more than a defender, which works better as Normal, Steel or Poison.
Gyarados also has the Water/Flying typing which I think is only shared by Wingull. While this does make it vulnerable to electric attacks, it adds grass resistance, separating it from other water types further.
While I do love both designs Gyarados edges it for me.