@ NJ5
With regard to things like Java performance, the PS3 will have an advantage for a long time to come due to the Cell processor present in this device, even if the virtual machine uses just 1 of the 8 available processors on the PS3 Cell chip.
I think rival players should mainly try to compete in terms of form factor and pricing instead of performance. I think the more educated consumer will pick a PS3 at this point anyhow, especially if there are people part of the family interested in playing games or want to use other PS3 multimedia strong points.