That depends. Having owned both it all comes down to your needs and wants.
AMG:
Best daily driver there is.
The E55 I have now is extremely comfortable, torque is retarded (560wtq...) and gas mileage on highway trips is pretty decent. And it just looks so damn good.
M:
A more balanced, all-around Sports car.
The E60 just felt special. It was so easy to get sideways and control. Gas mileage was horrible. Beast on the top end. Sound was out of this world. It just didn't make the best daily (No low end torque, burnt oil and gas like crazy, SMG was meh...)
Mind you I'm comparing just 1 model from each line-up. But I'll say it again.... AMG = Best daily. M = Best all-around sports car. Audi RS = Mixture of both + Quattro for Canadia...
Which would I choose? That depends on the model...