1J is a far superior motor as far as engineering is concerned. The 7M is the last revision of a long successful line of Toyota motors and has stood the test of time. However, compared to the 1J, the engineering is without a doubt antiquated. The 1J appears to be more tolerant to people who don't maintain their cars i.e. oil levels etc, with the 7M requiring more attention to detail. The 1J (and I have ridden in several) in my opinion is kind of lame on the street with all the power being in the top end of the RPM range. It is great for going fast down the freeway with a very smooth power band provided by the twins. The 7M owns the stoplight to stoplight pulls with its lower rpm range and torque but falls on its face above 6k rpms (unless you spend $$$ on headwork to make it rev). The 7M is very affordable to get into 400-425 rwhp range and maintain reliability. You will spend 5k to 6k on a swap and have a used motor that might be 350 hp with some good tuning. Not to say you can't make the 1J a 450 hp beast, you can, but it will cost you much more in the end. When you start getting in the 500hp + range, its a different game and its going to cost you to play in the big leagues. The 1J will probably win in this arena, with the 1J being able to handle more hp on stock internals compared to the 7M. But really, what are you going to do with over 500hp on the street??? To me, this is not a daily driver. It really depends on your driving style and what you want to do.
I have been on the fence on which direction to go, but I am staying 7M. My 7M has very high mileage. Sure the valve stem seals are going, and I may have some blow by on the rings, but the MHG is still holding strong and the motor has power enough to get the car sideways in the road. I know the abuse I am giving it may shorten or terminate its life, but I will beat on it until it dies. In fact, I have the money set aside to for a new factory shortblock rebuild... but why pull a motor that is still going strong? I have intentionally been beating the hell out of the motor hoping it would die, so I can proceed with the heart transplant, but the 7M won't let go! The 7M is one heck of a motor and can run 450 hp all day long on stock internals. Keep the oil full, perform routine maintenance, and drive hard.