If I could only have one or the other, I go all the way. Gameplay is all and anybody who's willing to toss gameplay out of the window for the pursuit of slightly more polished 3D deserves all the garbage the games industry can throw at them.
Specifics; Nethack and Sensible World Of Soccer are the two games that spring most immediately to mind in this conversation. Nethack has practically no graphics to speak of (it's all ASCII) and SWOS aims solidly for functional rather than aesthetically pleasing (the players are about nine pixels high), but damn if they aren't the best playing examples of their type.
Doesn't mean they have to be exclusive, of course; Bayonetta looks stunning (particularly in Paradiso) and is a ball to play, and my favourite game of all time is still one of the first to strike the right balance (Head Over Heels, 25 years ago). But if I'm playing the game, I want to be enjoying myself and shock-and-awe graphics lose their appeal very quickly.