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People keep asking this every month. D: Well, both are bad due their HUGE weakness to the almighty...
Spoiler:
Luvdisc! :O It OHKOs or 2HKOs pretty much anything, and has a WIDE movepool. Its stats beat Arceus's totaled stats! Nothing can get better that it.
I am JK...
I say both are matched, both have awesome stats, great movepool. Though, Palkia has a better typing coverage, almost as good as Ghost-Dark. Really, it depends on the team used with...
Did you also know that in the new smash brothers that it is also a pikachu that was breed and then raised to be a pikachu because it has Volt Tackle? Curious that huh?
On topic, I seem to like Palkia more than Dialga. Whenever I battle with my Dialga it seems to die probably due to the fact that I always battle his weaknesses. ::sigh:: oh well, I'll raise him someday.
This was argued so much. it honestly doesn't matter. Everyone knows Palkia is more suited to competitive battling with Dragon/Water STAB moves whereas Dialga has Dragon/Steel. Also, It's probably better in-game (I wouldn't know too m,uch, I like to keep 'em UT)
They totally have two different functions, one (Palkia) he is used for stopping Scarf-Kyogre, that otherwise with Water Spout he could create problems in the uber metagame, the other Dialga is used as physical Power Upper thanks to Bulk Up, in few words they are totally 2 different Pokémon, to decide what both the best of the 2 needs to see the team in which would be liked to use them, mine preferred is Palkia however.
The "Who beats who?" arguament isn't valid, since there are palkia sets that rape dialga and there are dialga sets that rape palkia. As sebastian said, they also perform completely different roles so it's impossible to draw a valid comparisson there either. However I think the dragon-horse-DrWho hybrid of dialga looks cooler.