Solution 1:

"That's such a cooler design" sounds odd, even in the context you provide. I would go with "that design is so much cooler".

Solution 2:

A "cooler" is a styrofoam case for keeping drinks cold on picnics, at the beach, etc.

"Such a cooler" means "A cooler just like that"

Example:

The beer would stay a lot colder if you bought such a cooler.

Saying "That's such a cooler design" does not sound like something a native speaker would say although colloquially you might get away with it if you don't mind sounding like you're a teenager:

Pretending to be gay is, like, *so* five-minutes-ago
It's, like, um, *such* a cooler design, ya know?

The problem is that "such" modifies "cool" in the same way that "-er" does, and they clash a little bit.

Solution 3:

I have never heard that sort of sentence construction; it sounds very odd to me. You could certainly say, "that is such a cool design."

If you use "cooler" then you are comparing it to something. You don't necessarily have to say what you are comparing it to in the same sentence, but it should be given in the context.

You could also say, "that is a much cooler design."

I am curious where this sentence is common. As I said, I have never heard it, and I have lived in the North East US and Northern California.

Solution 4:

I hear that phrase all of the time and have used it as well. Whether or not it is "proper" depends on your audience.

It is proper English to use with my coworkers. It isn't proper English to use in an interview with a company with collared-shirt employees.