I'd choose Sheffield in a second. Sure, Nottingham might have a (slightly) better reputation, but it's definately not big enough to base your whole decision on. I've visited both unis, and much preferred Sheffield. Nottingham might have a pretty campus, but it just seemed so isolated to me. Sheffield is near the city centre, has a great Students Union, and is just a nicer city imo.
I also much much prefer the Sheffield course. But that's just me. Have a look at both courses because they differ so much (in Nottingham, you do language and drama as well as literature, and you don't get anywhere near as much choice as Sheffield). Which one do you prefer the sound of? Would you prefer to be on a campus or not?
I'm not slagging off Nottingham; it's a great uni, and loads of people love it there. It just definately wasn't for me. Sheffield on the other hand I absolutely loved, and very nearly made it my firm choice (it ended up being my insurance).
We can all tell you what we think, but I'd really advice you to think about the two questions I asked, because they are probably the biggest differences between the two.