I was always a big fan of the SAW, especially the paratrooper version. I liked the rate of fire, the weight, the portability, and the fact that it fired the same ammo that the rest of the platoon did (TOW platoon, no 7.62 weapons). Although I respect the capabilities of the 7.62 weapons, and recognize the effectiveness of a machine gun on a tripod w/T&E (and a gunner who knows how to use it), I was never particularly enamored of the M60 (but that's most likely because I was always the one stuck carrying it in ROTC and IOBC ;) )
My first platoon had a lot of extra weapons (because we were short on troops... and about everything else... Clinton era) so I carried an M203. I got to be pretty good with it, but that was when all the shooting was taking place on one-way ranges, not the two-way ones. I also went to the mortar leaders course and got to fire the 60mm, 81mm, and what was it, 102?mm mortars. Again, with a gunner who really knows what he's doing, mortars are extraordinary force multipliers.
Of the two, though, for squad-level urban combat (which is kind of how I framed the question) I'd go with a 203. It has a flatter trajectory of fire than a mortar, it's easier to get good at shooting (IMO), and it's affixed to Joe's primary weapon, so there 's no need to tote around and addition weapon or weapon system.