His clothes have a little bit better stats.

I always let him live, he's a pretty entertaining follower.

Kill poor cicero! He's a traitor!

Me thinks you've got your traitors mixed up. Astrid was the real traitor, not just to your character, but to everything that the DB has ever stood for. Cicero was the only one willing and able to uphold the traditional ways. He may be a little cuckoo in the brain, but he's the furthest thing from being a traitor.

You can't decide
Whether he should live or die
Oh, he'll probably go to Sithis
Please don't hang your head and cry
No wonder why
Your heart is dead inside
It's cold and hard and petrified
Lock the doors and close the blinds
We're going for a ride!

On topic: I let him live.

Use your spell to call the spectral assassian. He'll tell you that Cicero is not meant to die (or words to that effect). Enter the Dawnstar house and fire up the spell. Talk to him.

Of course that don't mean you can't kill him.

I let him live. I like Cicero. He's one of the more colorful chars in the game.