Depends on what you want to do with the rifle. Not all AK's are equal, theres some that are real POS's, they're the ones going for 300 bucks. You can get a quality AK for around 500 or so, still way cheaper than a decent AR platform rifle, but with the AR, you have endless possibilities. Turn your Plain jane A2 into a varmintor with a new upper, or slap on a compact lower for some CQB qualities.....Endless...but so is the price. But...if you want a dependable, fun blaster, go with an AK, you can get milsurp ammo way cheap, and they're lots of fun. Ar's can be very dependable if quality parts are used or you go with the top manufacturers, Rock River, Olympic arms, Bushmaster ect. For an AK, I've always had great luck with Romanian and Chinese(norinco) AK's As for the ballistics, it all depends on the loads, the AK is a good size round traveling at a moderate speed, the .223 is faster, has a farther reach, but is affected more by wind and the such. On ammo, theres no difference in the .223 remington and the 5.56, the 5.56 is a NATO designation, the only difference is in the brass. Most military cases have the primers crimped in for durability in belted ammo, commercial brass doesn't go through a machine gun, so, no primer crimp. The military brass is also a tad thicker, so reduce your charge a bit when loading up using 556 brass.
If your looking at either rifle, go to aimsurplus.com and take a look, they have surplus, gently used leftover ect AK's and AR's for a very reasonable price.