Well machan thats a tough call. Two phones have special features in different areas.
w700 is a walkman phone which means it will have real good quality music compared to Nokia 3500. Plus the camera is provided by Sony in w700 meaning it will have better quality "still shots" compared to the Nokia phone (I dont know how the vid quality will be. I think the Nokia will out perform SE there). Also the memory capacity is better in w700 coz u will get a 256mb memory card with the phone.
The best place where Nokia 3500 will go over w700 is Enhanced Data Rates for GSM Evolution(EDGE). This feature is not contained in w700. It will facilitate faster internet browsing in a phone. Plus Nokia uses mini USB which is easier to use and faster than v2.0 USB in w700. Even though u get memory in w700, if u can upgrade the memory in 3500 it will perform faster coz Memory Stick Duo Pro which is used in w700 is not as fast as microSD (TransFlash) used in Nokia 3500.
So u should choose the phone based on what u expect from it. If u r a music lover go for w700. But remember Nokia second hand market is always better than Sony Ericsson. Trust me on that.

. Hope you are satis with my answer.