I'm currently comparing these two technologies in an effort to offer a Layer 2 VPN service on our backbone. Our network is currently not MPLS enabled. Below is what I perceive as the pros and cons of each technology. If anyone has thoughts on or experience with either one of these protocols I'd like to hear your opinion.
Historically, because technology has to be managed, on a level or another, by humans, we have eventually arrived at technology that is easy, understandable and simple enough not to need network wizards at every activation. Because of this, I´d say that L2TPv3 will eventually prevail over MPLS, however the market share of MPLS might increase in the immediate future the tide towards IP-only cores has already turned and it´ll take 6 to 12 months for the large marketing machines to change to hyping L2TPv3 instead of MPLS as the latest buzzword. Pete