I went through the same choice a couple of years ago. Ended up buying new because the slightly used ones weren't much cheaper, you don't get a warranty, and you don't know how the previous owner treated them. ATV's can be subjected to some pretty serious abuse - they weren't built to drive to church on Sunday.

The 02 grizzlies did have a boiling gas problem - carb would get hot and they would quit. Not every grizz had this problem, but enough of them did.

IRS does ride better. I had a Yamaha Big Bear, bought an Arctic Cat 500i, the ride was quite a bit smoother. (got the Cat for $5800 OTD, by the way) However, that smooth ride is only noticable on rough terrain. If you're riding mostly hardpack trails, you won't notice as much difference. IRS also gives a lot better ground clearance, but again, you only notice that if you're crossing rough ground or splashing in deep mud/water.

Shop around - check out the Kodiak, Cat 400, or Rancher. They're all good. New models will be out soon, and the economy still isn't exactly booming, so some dealers are willing to deal. I set out to get a Cat 400 (needed the ground clearance for my rough farm), but the dealer didn't have one in the color I wanted, so he knocked down the price on the Cat 500.