I can actually speak from experience on both bikes. I actually got my hands on a 2009 Felt AR 1 frameset late this summer and had a custom build. I had some issues with my LBS handling a warranty issue with the frame after about two weeks and I got my money back and went to a different bike shop and scored an S3-TDF.
I was in the same situation, torn between the S series Cervelo and the AR Felt. My local shop was pushing the Felt pretty hard and I decided to give it a try. After I returned the Felt, I went to the Cervelo dealer and went with the S3. In comparison, the Felt was a lot harsher of a ride. It did feel fast, but I felt every little crack in the road. In my opinion, the S3 was just as stiff, but much more compliant. On the same rides, I feel much more comfortable on the Cervelo and my average speeds are a bit faster (probably due to the comfort). When sprinting, they both are very responsive, but the Cervelo just feels more solid and a little faster. I had the same wheels on both bikes, so the comparison is somewhat 'apples to apples'.
I would say that both bikes are excellent, but for me, the Cervelo is superior to the Felt in stiffness, comfort and build quality. Also, the S3 is a little lighter, but the 2010 AR 1 is lighter than the 2009 AR 1. Dave K. at Felt also said the 2010 AR 1 is more compliant than the 2009, so my comparison might be inaccurate if you're looking at the 2010 Felt.
Good luck and if you had other questions, let me know.