Is the same true for AOS4.1 
Yes, OS4 is 68K compatible. Has been forever. System-friendly stuff only, obviously, and that goes for MorphOS, too. I found 4.0 to be a little more crash-happy with 68K stuff than MorphOS. I haven't yet tried 4.1, but it sounds a little more stable.
Regarding multimedia, the MorphOS MPlayer port is zillions of times better than the current OS4 version. But TuneNet, an OS4-only audio player, supports a zillion different audio formats.
I prefer MUI to ReAction. I think MorphOS's (MUI-based) GUI configurability is easier and more powerful than 4.0's. Again, I don't yet know what's changed in 4.1.
I really dislike the use of shared objects in OS4 (There's a new directory called SYS:SObjs). They should really be Amiga shared libraries instead.
Bottom line, though, I think you'll be satisfied no matter which you chose.