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I had a 996 C4S until recently. It seemed to handle pretty well. But the car I drove most before it was a 90s AudiS2 which is hardly known for driving dynamics.
Got rid of it more because it was a tiptronic and it sucked. Sold it within a week though and didn't lose anything, so they seem sought after still.
Despite the fact my #1 car to own since I was 12 has been a 993, I've never driven an air cooled porsche so can't compare :-)
Chap I’m making the 996 engines with has decided he’s not busy enough and is also rebuilding a 996.2 Mezger to 4 litres and putting it in a C4S that’s converted to RWD.