Question: I am going to buy my first proper road bike, and I have been comparing entry-level carbon frames with top-level aluminum frames in the same series (Giant Defy). What are the benefits of carbon vs. aluminum frames? Is it better to get an aluminum bike with higher-end components or a similarly priced carbon bike with lower-end components?

Answer: 
Essentially this is about low end carbon versus high end alloy. Carbon is typically lighter and less harsh (more vibration absorption) than alloy, but is not as robust. I doubt that the alloy is much heavier. I think it will come down to the difference in component quality and your budget.

Personally for a training bike I would probably go for the alloy, but that is driven by my financial situation. If the bikes are of similar price and the components are of the same quality, I would consider the carbon. However I would not trade component quality for a carbon frame.

Edit : Seven years after the answer was give.
Many of the techniques learn laying up carbon, and with advances in hydroforming alloy, have lead to allow alloy frames that are significantly cheaper to fabricate yet nearly as light (if not lighter) than low end carbon frames, while having the characteristics of stiffness and compliance where wanted. You can no longer discuss 'Carbon' and 'Non-Carbon' frames as most major manufacturers have 2, 3 or more variations of carbon from 'cheap and cheerful' to 'insanely light and expensive'. The cost saving in Alloy frames put into better components leads to a better bike for the same build cost. As carbon is considered more desirable by many, it fetches a higher price for the bike.

TL;DR when buying a bike, look at the whole bike, not just the frame.
From <http://www.livestrong.com/article/86919-aluminum-vs.-carbon-bikes/> (I can't testify to the accuracy of this)

> 
> Aluminum frames possess the shortest fatigue life of any material used
>  to manufacture bicycle frames. The typical aluminum frame possesses a
>  life expectancy of five to 10 years. Conversely, carbon possesses the
>  longest fatigue life. Most manufacturers provide a lifetime warranty
>  on carbon frames. Some manufacturers offer a lifetime warranty on
>  their aluminum frames, but most offer five to 10 years.
> 
> 
>