I personally have the desire s so I can answer some of your questions. With the front facing camera you can make video calls but I believe you have to download a (free) app. I use one called tango personally and it works fine and you can call over 3g.

According to the figures the desire s has 360hrs standby time and the desire z has 430hrs but to be honest , you'll probably have to charge both of them every night if you want them to last more than a day.

Personally I went for the desire s because I think a front facing cameras very useful and I don't really need a slide out QWERTY keyboard but in the end its down to your preferences.

 

Processor is 800mhz on Desire Z and 1ghz on Desire S and speed is good with android O/S, I have the S and its really fast.

Desire Z is android v2.2 and S is the new 2.3.3 Gingerbread o/s, so check if Z is getting v2.3.3? and S has speech to text which is really good check if Z has it or will get it on a v2.3.3 update.

 

Looks ok to me the little I have done and the camera is really good for 5mp

 

The Desire S seems like the best choice if I had to pick between the two. It is newer (released this year), more powerful, has more RAM (768mb vs 512mb) and has the latest OS (2.3.3) and UI (Sense 3.0). My experience with a phone with 512mb means that after a couple of months using it, you'll start to get 'low memory alert'. The only reason someone would get the Desire Z is the keyboard.
HTC Desire S vs. HTC Desire Z - GSMArena.com

 

HTC Desire Z vs. HTC Desire S - GSMArena.com

The above link is a comparison of the 2 phones.

Personally, before getting my Desire S, I was also deciding between S and Z. Some of the more obvious differences are:
- Z is bigger and heavier than S
- Z has a hardware QWERTY keyboard while S doesn't
- Z was released on November '10 while S was released on March '11
- Z has bigger internal storage space (1.5GB) than S (1.1GB)
- Z has lesser RAM than S (512MB vs. 768MB)
- Z is running Android Froyo (2.2) by default, upgradable to Gingerbread (2.3) while S is running Gingerbread by default
- Z has a slower CPU compared to S (800MHz vs. 1GHz)
- Z has a smaller battery capacity compared to S (1300 mAh vs. 1450 mAh)

 

Internal storage isn't even that important since I usually have my own SDCards anyway. I would also consider a hardware QWERTY keyboard more of encumbered, as others have said - it is all down to personal preference.

I usually assign points for the features on phones I compare to work out which one works best for me. CPU, OS and battery life are the most important to me.

 

Definitely desire s as it is new and as mentioned above better features. That is of course money is of no concern.