Generally I've heard people recommend steel for street cars and aluminum for racing. You can drive an aluminum flywheel on the street, but can make taking off and clutch stuff a little trickier since it doesn't have the same inertia.
I had an aluminum flywheel on my Omni GLH.... I hated it at the track. The dyno may say one thing, but the track never lies. Maybe because it was such a small engine. A v8 may behave a little differently.... But what do I know.
