Of course it's better. In fact, FM 2005 uses the third generation of CM 4 engine, that, you know, CM 4 has so many bugs. It's the reason for releasing CM 03/04 which is use the second generation of CM 4 engine. So FM 2005 is based on CM series with different name. This thing happened after Eidos and sigames cooperaion in making CM stopped. Sports Interactive/sigames then released FM 2005 using CM engine and source code, while CM name itself owned by Eidos, so sigames had to use the different name. And now, Eidos accompanied with Sega and Beautiful Game Studios just released CM 5, that is used completely different and absolutely new game engine, not using CM engine anymore since CM 4 engine code is owned by Sports interactive.
Any reasons, as I can't spot any, FM is better in every aspect.
The most improved thing in FM is media interaction with manager, but don't hope you will do like what Mourinho said about Rijkaard!