I use both this and the newer Collins guide by Lars Svensson, but when I can only take one field guide with me, I take the Peterson. His immensely skillful paintings, which I appreciate more each time I use them, still seem to be the best available at showing the significant differentiating details that actually help me to identify new birds. Peterson also didn't allow his painted birds to strike eccentric poses that can make comparison between species difficult. (The paintings by Killian Mullarney that make up half of the Svensson book give Peterson a run for his money in clarity and beauty, but the other half, by Dan Zetterstrom, do not.)
The textual descriptions in Svensson's book are longer and more helpful on behavior than those in Peterson's, so it's nice to check my observations against Svensson when I get home. But I find the Svensson guide large, heavy, and tiring to carry around compared to the more compact Peterson. Compared to Peterson, Svensson has too few birds illustrated per page (and many of them are from regions of Europe far, far away), so that flipping through the pages to find the bird you've just seen is always faster and less frustrating in Peterson. Strangely, in this regard I suppose the dated format of Peterson's guide--with all the plates bound together on glossy paper at the center of the book--is really an advantage: you can visually home in on the right bird with minimal turning of pages. Perhaps the best of all worlds would be a format more like Peterson's American field guides--which find a happy medium between the closely-packed visual conciseness of this guide and the thick sprawl of Svensson--but in the meantime I much prefer this.
Both books are pan-European in coverage, but Svensson does have some added value for birders in Scandinavia, with more prominent illustrations of the local races of birds that are especially characteristic of this region--just as Peterson has added value for birders in the British Isles, who are likelier to encounter the British races of many species to which Peterson gives pride of place in his plates.
In sum, I would say that you really cannot go wrong with Peterson as your primary or indeed only European bird book--and certainly not if you live in Britain. This guide has won its place in my heart and my field bag.