(IMHO) the TT TDi (surely that's at least one too many 'T's???) is a lovely car, but as already discussed it's not really a 1 Coupe rival. The back seats are as good as useles, whereas the 1er can carry four in comfort.
The (petrol) TT is a direct rival to the Z4 (and a worthy rival at that), and the diesel TT really does occupy a unique niche in the market.
At the end of the day "ya pays yr money and makes yr choice", they're both cracking cars.
Personally I prefer the beemer, but that's purely down to my own circumstances and an (albeit occasional) need for four seats. Plus I like the glaces you get in the 1er, I think people are used to the TT now...