If Trotsky won the power struggle

[ag]

A few considerations:

1. Trotsky coming to power in 1925? Easy - just make him slightly more interested in bureaucratic struggle within the party and more observable what is happening around him.  Trotsky was the most natural successor after Lenin died.  What prevented this from actually happening was nothing that a good, ruthelss and personally loyal chief of staff (present from about 1921) couldn't have remedied.

2. As of 1925 Stalin was considered a "conservative" within the party, Trotsky was far further to the left on economic policy. Stalin did not give any hints that he'd turn left until 1928 or even 1929, when he needed to dump Bukharin (the last remaining co-ruler).  Until that point, he was all in favor of NEP.  There is no reason to believe Trotsky wouldn't pursue a similar  industrialization program in the 1930s. Given that NEP was staggering by that time, probably, due to Communist inability to commit to defending property rights, most likely this would have been similarly statist undertaking. There is not even a clear indication that it would be any less ruthless - Trotsky wasn't a fan of soft methods, so a ten million dead peasants wouldn't have made him change a policy, though he might have possibly listened to reasonable technical advice on how to avoid famine. 

3. The main difference would have been in terms of the scale of urban terror: Trotsky wasn't paranoid, so he would not be as much into show trials and purges.  Also, being extremely personally popular within the military (and cognizant of the fact), Trotsky wouldn't need any purges there.  Any dissent would be ruthlessly suppressed, of course, but that would only require periodically executing a few hundred or thousand people here and there.  A couple of concentration camps, as in the 1920s, would suffice - no need for a large-scale GULAG. 

4. Culturally - think of a much better relationship with the intellectuals, no imposition of "sociallist realism", continued sponsorship of all thigs avant garde and revolutionary. Overall, very presentable face to the west.  On the other hand, nothing like Stalin's war-time and post-war rapproachment w/ the Church could have happened. The regime would have been very sincerely secular and anti-religious till the end of Trotsky's days.

5. Militarily - Trotsky was an extremely popular head of the army. He'd never need or want any purges in that sector and, hence, he would have a much better prepared army (because of Stalin's purges, at the time of the start of WWII some regiments were commanded by leutenants, 3 of the 5 top commanders - the best 3 - had been freshly executed).  Furthermore, not only he had a far better track record than Stalin in the civil war, he was also a lot better at following professional military advice.  By 1939 Soviet military machine would have been formidable - and headed by some very tallented generals.  With full due respect to Gen. Mannerheim, but even he might not have been able to save Finnland. Even though Hitler might have actually prefered to keep Poland as a buffer state in this scenario, Poland wouldn't be safe at all.  Western Europeans would no at all object German rearmament - it would be vital for their own defense.

6. Foreign policy: even stronger relationship with the foreign Communist parties, much more aggressive fostering of revolutions all over, much more aggressive stance towards neighbors in the 1930s (especiallly Balts, Poles, Finns).  High probability of periodic attempts at military take-over. On the other hand, possibly overall better relatioship with more moderate left - Trotsky wouldn't really hate Social-Democrats, though he might fight them. Under Trotsky you could actually see a KPD/SDP coalition in Germany.  Not much likelyhood of anything like Molotov-Ribbentrop pact, though, if Hitler were still to come to power - Trotsky neither would need it (he'd have a much readier army), nor would he be principless enough to sign it. In Spain, you'd actually see USSR declaring a war and going for the Republicans with full force (possibly even invading Germany, if needed).

Overall, it would be still a ruthless regime, but much more coherent ideologically. Think Fidel Castro, but even more sincerely Revolutionary and ideological.  I'd guess, in many respects it would be a tough opponent: for a Western leftist there would be a lot less to feel uneasy about, so the pro-Soviet left would be both larger and more radical.  On the other hand, continuous repression of all things nationalist/Russian/religious would have fostered a strong resentment within Russia itself, which might have become a serious weakness.

[ag]

.  With the fairly static economy and society of Czarist Russia swept away by the Revolution, pretty much any non-kleptocratic government would have enjoyed an economic boom.

Actually, in its last decades Czarist Russia had anything but a static economy: it was rapidly developing, though from a meagre base. The revolution took away the main pre-condition for that development: independent courts, that had been established by the 1864? reform, were destroyed.  the 1864?-1917 period is the only time in Russian history of an actually functioning system of administering justice and enforcing property rights (subject, of course, to all the problems of a sclerotic bureacracy, still feudal land-owning, lack of basic education, impotent semi-elected legislature and a largely unconstrained autocracy). 

It's not enough for a government not to be cleptocratic - it would have to be able to commit not to "honestly" expropriate, and, given the fact that by the 1930s the Communists had no credible challegers, they also couldn't make such a commitment: nobody would believe them.

[ag]

In any case, it's quite likely Soviet Russia would have fallen to the Nazis in WW2. While Trotsky was arguably more benevolent than Stalin, it was precisely Stalin's psychotic ruthlessness that contributed to the Red Army turning the tide at the eastern Front. When the RA was defending Moscow, Stalin basically ordered anyone who refused to fight to be shot immediately. I doubt Trotsky would have done likewise. But then I guess that's neither here nor there.

Your reasoning is represented by the Stalin quote "In the Soviet Army, it takes more courage for a man to retreat than to advance".  (Or something along those lines)  There is no doubt a great reason for the ultimate success of the Soviet Union in WWII was Stalin's method of handling the military.

I have just discovered a great document. It is a Civil War leaflet, containing extracts from Trotsky's orders against desertion (specifically, Orders No. 52 and 65 of the Chairman of the Revolutionary Military Council comrade Trotsky). This is for those who think Stalin invented ruthlessness. I quote:

"Against desertion, there should be a merciless fight. For obvious deserters there can be only one punishment: execution by shooting.

"All executions should be published in Army orders, with names, units, and, wherever possible, hometowns.

"1) Every scoundrel who incites retreat, desertion or not fulfilling an order will be shot.

"2) Every Red Army soldier who leaves his position without an order will be shot.

"3) Every soldier who drops his gun or sells any part of his uniform will be shot.

"4) Throughout the frontline area, as well as behind the lines there are special units catching deserters.  Every soldier who tries resisting these should be shot on the spot.
...

"6) Those guilty of cover up are subject to being shot.

"Death to those concerned about their own skin and traitors!

"Death to deserters!"

Trotsky

[ag]

Wow. Now that's a bit... insane. Its surprising the commies won with such sh**tty tactics.

Aren't those exactly the methods that just a little while ago somebody here claimed helped Stalin defeat Hitler?  Actually, at least the first two of these points were lifted directly (aside from some verbiage) off the pre-revolutionary military code (and were not that dissimilar to military regulations in other countries at the time).

[ag]

Imagine how scary a soviet union with a sane economic polciy and no purges would be to the west.

It wouldn't have been scary at all - it wouldn't have been Soviet Union.