To the OP:
Don't subscribe to all the hogwash in the SDN forums about prestige, academia and residency placement. The bottom line is that prestige is a SECONDARY factor in residency placement. This statement is corroborated by not only Kenneth Iverson, who wrote the gold standard book for residency preparation (i.e., Getting Into a Residency), but also the house staff listings at top residency programs. With respect to the latter, if you do the research yourself (which is what I did), you'll find a surprisingly high number of graduates from mid-tier and unranked schools at very prestigious residency programs. I encourage you to explore the websites for various top schools and check out the house staff listings for the residency programs--you'll be pleasantly surprised. The beauty of the Match is that it truely is merit-based, meaning that your performance in medical school (clinical evaluations, scores on standardized tests, etc.) is paramount.
Some people will argue that students at top schools have easier access to letters of recommendation from nationally and internationally renowned faculty. While I agree that this is true and also that letters of recommendation play an important role in the Match (Iverson makes this very claim along with many individuals in the SDN graduate medical forums), one should be aware of two things:
1) Students can do "away" rotations at schools where they want to match, and these away rotations are golden opportunities to "network"--i.e., establish connections with renowned faculty, chairpersons, etc. Similarly, students can set up research stints at other schools, which is a great way to establish a mentoring relationship with prominent faculty member at another institution.
2) Getting good letters of recommendation from top faculty requires initiative. the student has to forge the relationship with the faculty member. Thus, the letter of recommendation argument in favor of prestige only applies to people who are unwilling to go the "extra mile," so to speak, to make connections at other institutions.
If you think that you can attend a prestigious medical school and simply scrape by with mediocre marks, and still manage to land a choice residency program in a competitive specialty, you're sorely mistaken. Prestige can't compensate for lackluster performance. Top residency programs want the best students, regardless of what school they hail from.
The whole academia argument--namely, that you should attend a prestigious medical school if you want to go into academics--is totally bogus. Check out the faculty profiles at a wide variety of medical schools; you'll see faculty members, including tenured faculty, with medical degrees from a lot of different medical schools. Again, success as an academic physician depends almost entirely on your own leg work (i.e., your publications, your teaching ability, and other notable accomplishments such as pioneering work in a particular field).
The ONLY scenario in which prestige is truly beneficial for academia is the issue of chairmanships. If you want to become the chairman of a department, then prestige should be a factor in your decision. But even in the case of chairmanships, you'll find numerous exceptions to the rule that prestige is a sort of prerequisite for success. It's certainly true that where you do your residency is more important for the purpose of getting a position as a chair than where you went to medical school. Certain residency programs (usually the most prestigious ones) are designed to produce academic leaders--the neurosurgery program at Columbia comes to mind. These places are trying to produce future chairs of departments.
The bottom line: your ultimate professional and academic success will depend on what YOU accomplish as a medical student, resident and full-fledged physician, not on your institutional affiliations. The medical field really is a meritocracy.
Good luck in your decision, and if it isn't obvious by now, if I were you I'd choose the cheaper option.
