I haven't played much of Dead Island, but from what I played I can tell you that Dying Light has better combat, although weapon durability was such a pain in the ass that at some point I just went "fuck it, this isn't fun!" and used the duplication exploit to get 3-4 of each of my favourite weapons. Normally I don't mind weapon durability in games, but in Dying Light, weapons break easily and you can only repair them so many times before they're broken for good, which means you will just stockpile weapon mods (which increase speed, damage or durability) instead of just wasting them on something that'll break soon. Some of the weapons you can craft are really fun, but again, having those break easily kinda makes you want to not bother with them.
The parkour stuff is fucking awesome, best parkour game since Mirror's Edge, loved running around the city mocking the zombies that couldn't keep up. At some point you get a grappling hook and then it becomes the Best Game Ever. The special zombies that show up at night make for a fun challenge and they can be quite scary until you learn where the safe-zones are and the best path between them, even then, they're quite the threat.
It isn't that long if you're just playing through the story missions, though running around just killing zombies is so fun you'll soon forget there's a story. Speaking of,
The world is fairly big, divided into a couple of areas with some indoor sections (indoor stuff mostly reserved for story/side quests), there are also quarantine zones which are special sections you can clear for some decent rewards, though they're filled with special zombies. Overall, it's big enough for a game where your main way of getting around is parkour.
In general, I liked it a lot, were it not for some annoying story missions, and the way it handles weapon durability it would be among my top *something* games of all time. \m/ \m/