With all the shit going on, would you feel more comfortable with BTC in Gox or fiat in Gox?

You can take legal action if they mishandle one of those two things  

I think people are selling off their coins while they can for fear that Gox goes under with whatever they have in their accounts. At least with dollars there's a chance for recovery. You have to remember that the vast majority of Bitcoin owners have a collection of coins in the single digits. A lot of people with a few coins each man... it adds up.