Ok. Since I'm the OP of this thread, I thought I should be prudent to purchase the Reeder app and see what the hoopla is all about.
But actually, I've known about Reeder for a while but have not bought if for my iPhone since I'm already using MobileRSS, and mainly I wasn't too hot on the colour of the paper they used for background (personal taste) and lack of offline viewing at one point.
Initial Impressions:
Sync speeds: Both apps are the same. Fast! Feed headlines and article load times are fast on both. But Reeder finished syncing before MobileRSS as Reeder appears it doesn't download images until you go to the actual article. MobileRSS downloads all images so unread articles are ready with content. This is important for offline viewing and I'll get to that in a moment.
MobileRSS wins
Navigation:
Both apps are fast in terms of navigating around and vertical flipping to next/previous page. Reeder's approach instead of a list/menu uses thumbnails for your subscription groups. For some reason, touch holding the thumbnail did not expand the like grouped photos/albums in Photo app as shown in the App Store's screenshot. I guess the thumbnail setup is unique and is what distinguishes Reeder apart from other readers. It's different, but if you have a lot of subscription groups like I do, plain white thumbnails populate the entire dark screen. Too boring for my taste. Since you cant change the thumbnail colours or move them around, finding your subscriptions can be challenging like I have. If the developers can improve on this I may give Reeder's navigation a second look but for now MobileRSS wins.
Images/Cached Images:
As mentioned in Sync speeds above, both apps behaves differently in this section. MobileRSS has the advantage by downloading all the images of new/unread feeds as you're reading while Reeder downloads images only when you get to the actual article. However I found a bug in Reeder as some articles had text loaded on top of the images (one good example is appshopper rss feeds and some photo blogs I follow) in Reeder.
MobileRSS wins
Offline Viewing:
Because MobileRSS downloads all content (if available) for every article you get full offline viewing. Reeder you get the text with a bunch of blue boxes with a question mark.
MobileRSS wins
External Integration / Services:
Both can export articles to Twitter, Instapaper, Delicous, Read it Later, Mail Link etc (11 total) but Reeder does 12 with Pinboard being the difference.
Reeder wins for having 12.
Ad Filtering:
MobileRSS has some filtering but Reeder does not.
Mobile RSS wins
Readability:
Although Reeder tries to make the background look like newsprint, I have issues with the layout and font. There's just too much wasted space in the layout. For example, articles in both portrait and landscape have huge surrounding borders of blank space this makes the text small and there's no way in adjusting the font size. Reader does not utilise the iPad's screen very well in this regards. You can't even pinch to zoom! If you pinch you get out to thumbnails screen.
MobileRSS has a light grey background but the text can be adjusted to 5 different sizes from Small to Giant and the layout of the article extends almost to the edge of the paper. You can also pinch to zoom to read smaller text and also enlarging photos.
MobleRSS wins
Price:
Currently both are $4.99
Conclusion:
I really wanted Reeder to best MobileRSS for spending another $4.99. I really hoped for not sounding biased by giving examples. But MobleRSS is still by far, THE BEST READER available today for iPad. Really I wasted of $4.99 looking for the answer I knew already. So if you haven't both apps and still deciding on a full feature RSS Reader, look no further than MobileRSS. I hope this helped some of you.