Elf is better for a few reasons,
Screen resolution
More powerful cpu
Camera
Not mips based so more apps will be developed to use on the device than paladin. But paladin is a great price for what you get.
Ainol Novo 7 Elf II is not in the market yet, but Ainol announced that Ainol Novo 7 Elf II & Aurora II will be available later this month. With dual core and IPS screen, Ainol Nobo 7 Elf II is better than Ainol Novo 7 Paladin. Also, app compatibility on Elf II is also better.