Points. ALWAYS use points. At least if you're looking for an equal(ish) game.
Power level is decent if you're quickly setting up a narrative game, but the mechanism sucks for actually balancing things. The free upgrades you mentioned play a big part in that, as armies that can bring a lot of upgrades have no incentive NOT to kit things out with everything and the kitchen sink.
Ask not the Eldar a question, for they will give you three answers; all of which are true and horrifying to know.