If you haven't already, you should get the Heart of Winter expansion for IWD. It's not just some extra areas, it actually makes some really nice improvements. Higher resolution, more items, more spells, more bard songs, game balance changes, etc. I'm really starting to like IWD quite a bit. It has tons of items, all with interesting histories, and the fact that many items are randomized leads to some nice replay value, or a little bit of variety at least. I also like the fact that there are more items that are class, race, or alignment specific. Very cool.
As for IWD being hack & slash, well there is a lot of fighting, but it's not just mindless killing like in Diablo 2. There are some great battles that will have you on the edge of your seat, especially if you build a party with somewhat realistic stats (no 18/18/18 chars).
I think I still like BG1 better though
