I agree with neurodropout, but gutonc has some great points.
Also as mentioned above, I think that you should at least consider the cost of attendance as a factor in your decision. It is also important that you be happy at the school you attend as well...if you think you'll be miserable at that particular MD school, you might not do well, which will not lead to happiness or a good residency.
If you think there is even a moderate chance that you want to subspecialize in one of the more competitive surgical fields, I think you should strongly consider MD. I just don't see many DO's in those fields. DO's also won't make it into derm or radiology allopathic residency, for them most part, but I know they have their own derm residencies (likely rads as well) and they might not be any harder to get into (? might be easier).
I don't think it should be a decision solely of MD vs. DO school. You say that the DO school seems like a much better fit to you. Why is that? If you told us a little more about your career goals, and the two schools, maybe we would be more helpful.
There are some fields like physical medicine/rehab or rheumatology where I could see DO training being more relevant/useful than MD training.
In regards to your original ?, yes, I think there is still some discrimination against DO's, particularly at certain hospitals in certain fields. Also, remember that if you go DO and then want an allopathic residency, you'd probably have to take the COMLEX and USMLE both, which would be a pain to study for whole sets of exams, IMHO.
I'm from the Midwest and we have a lot of DO's, particularly in primary care, and I don't really see that it's much of a problem in terms of them experiencing discrimination. Gutonc does have a point about patients, though...they are generally clueless about residency and tend to put too much stock on the doctor having attended a "name" school. That's for the patients who even ask or know about medical schools...a lot will never even ask you. Other docs will generally respect you if you do your job well and seem to know what you are doing....