Lyrically i think its a step up. The production is very different to Illmatic, trackmasters have a mainstream sound but they still gave it a dark tone that fits with the really grimy stuff like 'suspect' and 'live nigga rap'. The production inspired some of Nas' best songs.
I think the lyrics and themes on this are quite deep, and Nas just improves with darker and deeper raps.
I don't know if its better than Illmatic, thats almost if not a perfect album. But its a classic.