Though I am using a Wagon-R at present, I will advise you to go for Santro. Over all Santro is better than Wagon-R.
+ve of Wagon-R : Better ride & suspension, less on maitenance, slightly more fuel efficient.
+ve of Santro: Better pickup, more silent at high speed, much better head light, better seats & thigh support, wider rear seat, better plastics, better gear shift.
Mileage of my Wagon-R: W/O AC : City-14.5, High Way-17.5, With AC : City: 13, HW-15.5-16. Mileage of Santro is very much comaparable, may be 0.5 km less than Wagon-R.