It is difficult to find out who is the better actor. Both have their own qualities and also limitations too.. Anyways they are the proud stars of malayalam film industry, even famous in indian cinema. As every one knows; 'Mohanlal is a born actor while Mammootty is a trained actor'.
My favorite movies of Mammootty:- Thaniyavarthanam, Vesham, Mrigaya
My favorite movies of Mohanlal:- Thalavattom, Bharatham, Chitram, Kamaladhalam..
And personally i am a little more fan of mohanlal.. I like the combination of Mohanlal and Priyadarshan very much, and I still have a hope that they will combine for giving as an another super film..
However no doubt in one thing: Both Mohanlal and Mammootty are excellent actors..