I currently own a PS2 and a Wii.  I always assumed I'd get a PS3 when they came out because the PS2 has so many great games.  But I initially had sticker shock, and then good games were slow to come out, and then they cut backwards compatibility out.  Needless to say, Sony hasn't done much to encourage me to upgrade, yet.  However, with rumors of price drops, I'm starting to consider it or an Xbox 360. 

Here's how I view the two choices:

Xbox has a more complete game library and I hear it's better online, but I'm not convinced even the new units won't RROD--and they are loud.  I won't buy the arcade unit (wired controllers, no HD), and I need wifi because my tv and router are in different rooms, so I view Xbox as the same price.

PS3 has blu-ray, I've heard better build quality, and I think there's probably enough games out now to keep me happy.  My favorite PS2 games are Kingdom Hearts, FFX, and Gran Turismo.

I'm still leaning toward PS3, but am still willing to go with Xbox.  So--convince which choice is better.

The Arcade SKU comes with wireless controllers and an HDMI port (although no cable).  It was the Core SKU that did not have HDMI (neither did the original Pro SKUs) and wired controllers.

Edit - You can also use a wireless router as an access point and plug the X360 into it.  A bit convoluted but its cheaper than the Wifi adapter.  This drops your entry price of the 360.  However, it should come down to how much you value each systems current and future game libraries and if that is enough to justify the extra cost of the PS3.

Well seen as the price isn't an issue. This is very easy.

Take a look a the current and future libraries of both consoles.

Make a decision.

Hmm...

Well, I won't pressure you towards any console, because really it's completely up to the consumer-You.

But, I will suggest:

1. Gran Turismo 5, it's coming either end of '09 or a definite '10 release.

2. Kingdom Hearts 3 is still yet to be announced on any system, unfortunately.

3. 360 or PS3 you can look forward to Final Fantasy XIII, FFXIII Versus is PS3 exclusive (at this time anyways).

4. If you plan to use Blu-Ray then it's a good investment, it's starting to really catch on.

5. 360 Online is a lot better than PSN, but it's not Free like PSN. Although there are 360 Gold Live deals out there (don't buy a subscription from M$, buy it from a store.

6. 360 has Netflix streaming, which you can stream HD movies as well.

In the end It really depends on what games you like. 360 may has a bigger library. But don't let that discourage you from getting a PS3, PS3 has a strong library as well.

Currently the only thing I want a 360 for is it's RPGs :P.

My two cents:
- X360: Jasper should finally solve RROD problem.
- PS3: Doubt Kingdom Hearts game ever will be released on PS3 exclusively, Final Fantasy multiplat.

k well here it is for you.

if you like gran turismo and final fantasy then it is handy to know that you can only get that combination on the ps3. Kingdom Hearts, i cant comment on that. that will probs be a Wii game or HD multiplat so it is a non-factor really.

If you need wifi and all that it is already built into the ps3. if you get a 360 you will need to buy it separately.

You also mentioned that HDD are important to you. well you can eva get a 360 arcade and buy one of microsofts xbox HDD separate. Or get another model of the 360 with it in. All ps3 models have a HDD so that isnt a real problem.

With the ps3 you can play HD media with the 360 you cannot.

any difference between the ps3 and xbox online aint really that much. plus the ps3 online play is less lagy because it has dedicated servers where as 360 is not.

Most of the upcoming games are multiplat's anyway. plus the ps3 has really good exclusives. plus 2009 seems barren for the 360 on the exclusive front but saying that e3 is still coming up and some could be announced then.

this year though the ps3 has

god of war 3.
Uncharted 2.
War devil
Infamous
gran turismo 5 could be 2010 though
Final Fantasy 13 Japan only. multi in europe and NA
Mirros Edge
M.A.G
Sly cooper could be 2010 though
Demons souls
eyepet
Killzone 2
Quantum Theory
Ratchet & Clank Future 2
Yakuza 3
X-Edge
White Knight Chronicles