Madd Leveler keeps the basic leveling system but automates it somewhat. Instead of choosing attributes at level up, Madd increases attributes on-the-fly as you raise your skills and only gives you a choice of 1 point for three attributes at level up. In other words, if you raise Spear 3 times while playing, Madd will raise your Endurance 1 point even if you're no way near leveling up. It still requires resting to level and it does not change your starting Attributes.
GCD is a more complete change that modifies your starting attributes according to your starting skill levels and racial characteristics. It also modifies the way attributes increase by favoring attributes that have higher associated skills. There is no leveling up in the normal way. GCD tracks your level for leveled list purposes but differently from vanilla; levels are counted from Attribute increases, not skill increases. GCD is sometimes considered more restrictive because low starting skills contribute very little to attributes making it difficult to change focus mid game. On the other hand, if you plan your character well, you can be extra strong in one chosen area. Also, GCD provides slow regeneration of magicka (except Atronach) so it's ideal for a pure mage.
I've used both for years and like them both. There is one problem with Madd, however, that has come up lately due to the changes Morrowind Code Patch has made. There is a bug that messes up the leveling for Atronachs and sometimes also for Bretons or Orcs with resist magicka.
As to balance, Madd doesn't do much either way, you can expect to get about 10 attributes per level playing naturally but you can power level if you want to. GCD makes more difference especially with Health progression; almost all characters will have lower health than with vanilla so this can be a problem in the expansions.