I've owned a 96 GT for almost 3 years. The SN95 has aged well, it does not have the harder edges of the New Edge versions from 99-04. Biggest issue I've had with looks if the paint is shot, but the car is 16 years old.
Performance, no the car is not fast. It has the same rating as the 5.0 it replaced. Unlike what Jason said below, do some research, these engines can push 500hp NA and 650hp+ when blown (search MM&FF and 5.0 mags for details). I love the fact that I easily put 17x10 rims/tires on the back. Open up the exhaust (get rid of the 6 cats) and not only does performance go up, but nothing sounds like a Stang with Flowmasters!
The interior is standard Ford fair, the same basic stereo was available in multible car models. But find one with the Mach 360 and you'll be surprised by the sound. Door panels seem to be the biggest issue as they peel from the top. Replacements are still available from for from $250 for the solid black, and $700+ for the 2 toned ones.
Reliability. Only had a few repairs. Intake manifold cracked at the heater core head nipple at the back (common problem). Intake cost $150, took me 3 hours to replace it in my driveway. Fuel pump went out, upgraded to higher flowing one while I had the tank dropped $125. (Replace the gas tank filler grommet while you have the tank out $29 from Ford). And the crappy battery that is in the car from Advance Discount Auto Parts keeps losing its charge, not the cars fault (no drains)

First off Chevy dude is wrong on most accounts.

A 1996 Mustang GT can do 0-60 in 6.1-6.5 seconds and quarter mile in 15.00 to 15.1. It's not as fast as the 96 Z28 Camaro but it didn't need to be as it outsold the Camaro and Trans-Am almost three to one. It's top speed is 139 miles an hour. Him comparing a Maxima with 170 hp to a 215 horse power car with 285 pounds of torque....my god! An Auto GT would destroy a Maxima of the same year. Look at this Chevy Dude name and you can clearly see why he is angry about this Mustang. The 1996 Cobra Mustang was a whole another beast though, it busted the tail of the 96 Z28 Camaro easily on the strip and street. It has 305 hp and 300 pounds of torque and will do 0-60 in 5.4 and quartermile in 13.9 and 14.00 at over 100 miles an hour. I also noticed he took the best stats of a Z28 Camaro and the worst stats of a Mustang GT. I have seen Motor Trend rate a 94-96 Z28 0-60 in 6.2 and 14.5 in quarter before. They are faster then that but not everyone recorded the times he posted. Baised people shouldn't be allowed to write reviews.

This is the first year of the return of 4.6L. Well sort of, like the 5.0 being a 4.9 this was really a 280ci. Thats a 4.5L. This engine was lighter and more advanced? This was all bull. This engine has 215hp. Less than the little light 5.0s by 10hp and this car now weighed 300lbs heavier. That equils a slower car. The lack of torque couldn't produce the torque of the old 5.0 either. So this ment the car was slower in the quarter. Really this car in a GT coupe auto was slower then a V6 Maxima of the same year. Accually the 5speed was running around the same time of 7.0secs. Yeah, this is why the tuners can bash American cars. Things like this. Well now you're thinking that it can be tuned and hot rodded. Yeah, get another engine. The cobra 280, 351W, 302W, 347 or anyother injected motor. The reason I say this is the 280 from 96-98 only are good for a natrually aspirated 400hp. The 302 is good for 450-500hp. Oh and supercharging, well the engine is good for 450hp before reliablity becomes a real problem. In truth reliablity is never good with this car. It needs a waterpump every 2-5 years and 30,000 miles from Ford. Even when you upgrade this car will have more issues. I have had two friends that owned a 96 and 97 and they were in the shop more then the road. With little things. So as a hot rod, this car is awful.
Now for the good. Well the car has four wheel disc brakes and handles decently. The GT package makes the interior seems like a luxery car. I think thats what Ford thought this was. Pleasant dash, and easy controls; this well, is the cars biggest pleasure. And for some it is worth the issues. Not for me.
Ah the most important issue of a everyday driver, is the economic factor. Do you need a car like this. No. Do you want one, well I will try to give a positive view point. The car is luxurious, pretty(to some), gas milage is 17-25(manual) 16-24(auto){the same as a fox 5.0!), gets better emissons(ford biggest horsepower robber,{if emissons is a factor for you then what are you looking at a mustang for you jerk} also this dosn't mean that it will pass easier) and ABS. This is a confort car. Not for performance lovers at all. Really when you compare the 96-97 mustang GT to the Camaro z28 you are talking about a car that does 60- 7sec a quarter of 15.8 and top end of 135 VS 5.8-5.5sec, 14.1-13.9sec and 165mph top speed. They don't ever compare. So if you want a 96, well just say Cobra, Cobra, Cobra.
The real car to talk about. The Cobra has some of the issues but none of that is the performance. The car is good for around 500hp and is different then the GT block from the ground up. This car holds 300 hp and is competitive with other cars of the day and now.

In short the 96 is a bad year for the GT all around(except interior) and the Cobra had a good year.