Is it better to do quest for Lurraxol family or Alibakkar family?? Is outcome and experience the same for either one?

mini-spoil
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If your good, do neither and give the the item to the mayor to calm down the civil war. If your neutral it's up to you, if your evil and want to see a nice little civil war just give it to whoever and watch the dirt fly. both famillies give you the same thing and the mayor offer is just as comparable.

just visit one of the families to get the key once you have it the mayor will propose a deal with you.

i say see the fight between the families. besides i think you get an Elven chain from one of the family members when they die.

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Mess with the best Die like the Rest!!

Yes, if you let them fight you can pick up the Elven chain(thieves and mages can use it).I was a good party and i didn't lose any reputation or anything and i'm sure you get more XP if you let them fight.