Both are great cars. Were there improvements in the 987 series over the 986? Yes. But are they vital to your enjoyment? Not to me but it is your $ you are spending and only you can answer that question for you.
Drove stick for probably 30 years. Traffic got too bad and I found I wasn't as tired after the commute if I borrowed my wife's slush-o-matic. So when I went looking for my first Boxster, a TIP wasn't a bad thing to me. Liked my '99 TIP but the '01S TIP I have now is even better as it allows downshifts even when not in manual mode. I run manual mode maybe 10% of the time. TIPs are awfully reliable too. Haven't driven the PDK because I'd be tempted and the Boxster I'd really want costs $94k and change when I configure it. I paid about 28% of that and I have as much fun and receive as much favorable attention. Both my cars have had excellent reliability.
I didn't find the difference between a base and an S that significant and that was between the 2.5L 201HP '99 and the 3.2L 248HP. With the smaller engine, I could keep my foot down longer/stronger before I got to dangerous speeds. But you may find the difference significant.
You may find this site useful.
http://sites.google.com/site/mikefocke2/modelyeardifferences