Balrogs were the personal servicemen of Morgoth. They were mainly dormant in his abscence. Dragons, on the other hand, had a free (and reckless, i might add) will. Also, dragons varied much in color, power, and ability. Not as true with Balrogs. Sure, they varied in strength, but there size remained in the same ballpark and I've never heard of a blue Balrog (kind of fun to think about though, eh?). And, obviously, I am biased towards dragons *cough* *screen name* *cough*. So, dragons all the way.
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