In a 3d environment, sprites have systemic issues regarding viewing angles. If a bad guy runs directly at you, or at you from a 30 degree angle, he looks exactly the same. Models convey more information than sprites do about their environment.
This isn't a blanket statement about models and sprites, but given a free camera and a 3d world, I think models work better. They don't have to look better, though: I'd say that Quake looked a lot worse Duke3D, even though they were both released in '96.
This isn't a blanket statement about models and sprites, but given a free camera and a 3d world, I think models work better. They don't have to look better, though: I'd say that Quake looked a lot worse Duke3D, even though they were both released in '96.