It's been the biggest debate in gaming industry, for more than a year now... The PS3, is Sony target to move to the HD era, so do the 360, lets ignore the Nintendo WE, sorry the Wii system because the Wii is on the league of it's own. The Wii doesn't move into HD era, no DVD playback, juz a normal graphics with motion sensing control (which impressed my sister a lot). If you read the specs carefully (PS3 Specs), the PS3 have Cell Broadband Processor, which critics claim is the better one compared to 360's Triple Core (360 specs).
But at this point, game developers still can't unlock the potential of the PS3. Even though PS3 are more powerful than the 360. But for now, 360's RAM had the slight advantages over the PS3. The frame rate of the game are smoother, graphics are better in the 360 (but look at DiRT, PS3 has the best graphics compared to PC and 360), and loading times are faster, but the loading time can be solved by installed your game into the PS3 huge HDD (currently 20GB, 40GB, 60GB and 80G).
One huge advantage PS3 have over the 360 is the drive. PS3 has built-in Blu-ray drive, which is the main selling point of the PS3 because it's one of the cheapest Blu-Ray player available. Now the Blu-ray has helped the PS3 gaining sales, because based on CNET's recent blog, the Blu-ray is winning a lot (blog). 360 have HD-DVD support, but you need to buy an add on for it, which is the 360 console + a HD-DVD drive = PS3 price, which was expensive because the HD-DVD don't play games for the console.
Now, the main point... Why PS3 is defeated by the 360? The answer is simple, the price... PS3 is about a 100 bucks more ^^%$ DAMN expensive than the 360. But recently, PS3 new SKU, which cost $399 (the cheapest available) boosted the sales of the PS3 and the its reputation, but the console itself doesn't include PS2 backwards compatibility, removal of some USB ports, less memory space but it still plays Blu-ray and PS3 HD Quality game, phew!!!
In terms of exclusive game, 360 has the advantage... The 360 has Halo (one of Peter Jackson's blockbuster project), BioShock, Gears of War, Forza Motorsport and many more... PS3 currently only have Resistance, Motorstorm, Formula 1. But expect Sony will fight back hard in 2008 with it's popular Metal Gear Solid, GranTurismo and Haze...
Final Verdict: I think both of the systems are great in different way. But Wii, I don't really like it, I think the innovative design will get bored soon... A lot of games will play weirdly with the Wiimote (the controller)...
