As a Stanford MSTP, I would second wgu's thought: it's what *you* make of the situation that is more important. Especially at this level - both Stanford and Michigan are highly respected medical schools, and MD & MD/PhD graduates of both places match well and go on to stellar careers.
So more than rankings, I think you should consider whether one place or the other has particular key elements which you feel you need for your education and happiness over the next 7-8 years, and then weigh that against the offer of full funding from Michigan.
You might want to consider factors in several categories when looking at both places:
-medical education: style of preclin education (I think both are similar, i.e. plenty of lecture time, although U-M tends to be a little more organ/system-based), kinds of exposures you'll get during clerkships, plus subjective things like the institutional culture and your future classmates.
-research: key issue - in the fields you're considering, is one place disproportionately stronger/deeper than the other? This could be an important factor for some people despite an offer of full funding. My impression (please correct me if I'm wrong) is that there are certain fields in which Michigan is not as deep/strong, e.g. immunology, neuro, dev bio. I know that Stanford is particularly strong in those last two. Your interests are likely to shift a bit once you arrive, so keeping your bases covered is not a bad idea.
-quality of life: last but definitely not least. Location, climate, what kinds of things are there to do, closeness to family, other personal issues. I grew up in Michigan, so I'm pretty far from home which is hard, but I can attest to the fact that the weather out here is beautiful almost year-round.
If you did decide that Stanford MD was better than Michigan MSTP for you, there are many ways for you to knock down tuition costs and get a stipend during med school. You probably know about these (e.g. Med Scholars/TAships) - somehow, Stanford Med has very deep pockets, and particularly diligent students have used these resources to completely pay off tuition for some quarters.
Applying in-house for MSTP is definitely doable, and in general the odds are better than applying from outside. The in-house pool is smaller, and you can reapply if you don't make it the first time. Also, there has been some talk of expanding the # of funded MSTP slots at Stanford, as the new Dean is very committed to training physician-scientists here. I believe some slots have already been funded through Bio-X (see below). Of course, there is definitely no guarantee that you will get MSTP funding, which is something to consider. It shouldn't be a problem at all to get into an actual PhD program once you're here...the only issue is the funding for the med school part (your PhD studies would be covered regardless).
Also, I think that whether or not you're MSTP or non-MSTP MD/PhD, there is no difference in prestige to people inside or outside Stanford. Again, it's more of a funding issue.
One other issue which I can comment on. wgu mentioned Michigan's Life Sciences Initiative...Stanford also has something very similar, the Bio-X initiative, which is basically an attempt to bring together engineers, biologists, chemists, mathematicians, etc. to work together on problems which are ripe for interdisciplinary collaboration. See biox.stanford.edu. Bio-X has already funded numerous programs/initiatives, and the physical building itself is due to be completed soon.
Lots of things to think about. Good luck with your choice! If you have more questions I'd be happy to offer my thoughts.