ReadItLater Free has more features than the free version of Instapaper, IMO. If you're going to pay for the premium version, I think they are pretty comparable to each other. Personally, I prefer RIL because of its Digest view (it's a $5 upgrade but can still be used with the free version of RIL). The cool thing about Digest view, besides the great look, is that it automatically categorizes the articles/web pages you save.
BTW, RIL saves the original webpage - images and all - for offline reading in addition to having a text-only view.