[pete fabrizio]

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I would take the five cards and feel very comfortable about it even against someone who I knew to be a bit better than me HU PLO.

Here's an interesting side question that might be quantitatively answerable:
If the five card player must discard one card and keep a four card hand preflop before he makes any action, who has the edge then? How best should he set his hand? Should it change based on how his opponent is playing?

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I think the player with position has the edge here. If he has to discard it on the flop instead, I think that would be close, and a fun game to try.

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this might depend on when the card was discarded. if it was before any action on the flop that would be somewhat less of an advantage than if it was after the close of action. but either way i think the guy with position would still have the edge here if stacks were deep. if he could discard after seeing the turn, i'd give the edge to the guy with 5 cards.