Lately Sony has been coming strong. Reasons:
First for a while now they unveiled a big troika of games. Uncharted, Ratchet, and Heavenly Sword. Now, none of these games themselves really totally blow away 360 graphics, but they were all pretty top tier graphical titles.
Then the big dollop, Killzone 2, was added. The one game that in my opinion is head and shoulders above anything on 360 (not that 360 COULDNT do Killzone, I believe it could).
The contrast of reliable hardware to 360's defects plays to Sony's favor obviously.
The drop to $499 appears to have stimulated moribound sales of the system, and shown their may actually be life in PS3.
Also, Blu Ray has really been coming on strong in the HDDVD-Blu Ray format wars, and as the PS3 price drops has become increasingly compelling.
HOWEVER
I still dont think PS3 can beat 360 in North America. 360 is just too well rounded. Personally I can only imagine PS3 as a second console. I dont think it's online is good enough. You dont get flawless online play and everybody with mic's as you do on Live. You dont get the ease of MS service, the library of Arcade titles, demos, and videos on XBL easily trounces Sony. Morever, 360 seems to get far more/newer demos of third party games than PSN from what I can see. Not too mention movies. Also, 360 just has too much price advantage that will continue in the future, as a 360 price drop is near. Finally, MS game library with Halo 3 and Mass Effect is too strong in the short term. What I think MS needs to focus more on though, is ambitious (especially graphically) first party titles that really push the system...
