Honestly I have to say Xbox 360. The controller is more appropriately sized (The PS3 one is kind of wide). The online service, although not free, has some great features and is updated fairly often (~3-6 a year). The game selection is pretty good, and even though Microsoft isn't licensed for certain franchises (Killzone, Gran Turismo, SOCOM) it does have a very large game catalogue. Nowadays, what you're paying for in a Playstation 3 is not worth it. The newest ones are no longer Blu-Ray or Playstation 2 backwards-compatible. Those 2 reasons killed it for me.
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