The PS3 is pretty much a dead platform, at least as far as games are concerned. Sales in all regions have been abysmal, so many developers who were previously planning to make PS3-exclusive games have either decided to release for both the PS3 and the 360 or just the 360 alone.
Also, because Microsoft had a year head start, there's TONS of games out for the 360 that are really great. For the PS3, there's only really a few hits -- Resistance, Heavenly Sword, and Ratchet and Clank are about it right now. If you're into sports games, all the major titles are available for both platforms, so you can't go wrong either way there. The Xbox has -- by far -- the better online platform, so if internet multiplayer is your thing, that should be a consideration. Xbox Live Arcade and the Marketplace area also really, really cool.
Really, the only thing the PS3 has going for it is the ability to play Blu-Ray DVDs (the Xbox can play HD-DVD with an optional attachment), but it cames at a pretty steep price premium.
One final thing: the new 40GB PS3s that are currently on the market are not backwards compatible with PS2 games, since Sony cut that feature in an attempt to reduce costs.
Right now, I think it's pretty much a no-brainer; the Xbox 360 is the better of the two systems. That might change after a few years (although it's not looking good for Sony at this point), but you're getting the system now, not two years from now.
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