It's definitely still in with a shot...but lets ascertain the reasons - first party titles, blu-ray and if you were to believe MikeB 'significant superior technology'.
Personally I'm not buying that the PS3 will be commercially available any longer than the 360. Looking at the PS2/Xbox last gen shows that technology is nothing and marketshare is everything. The ROI will be too attractive for third-party developers to pass up the 360 to make use of Blu-ray space/better tech on PS3.
First-Party Titles) Anything you say here is subjective. They probably do have a better first-party library 'metacritically' speaking, but it's predominantly geared towards the hardcore gamers, which isn't the majority marketshare.
Blu-ray) Say the $349 PS3 absolutely smashes the $199 360 sales...what would be logically deduced as the reasoning? Perceived value of including Blu-ray standard would be my guess - so Microsoft can make a new sku with an internal BD included and still offer it cheaper, should this be the case.
Superior Tech) Personally I don't see this being much of a reason for it to sell more looking at previous gen trends e.g. PS2 over Xbox, PS1 over N64 where the gains were much higher comparatively.
I'm not writing it off but thus far I don't believe it to have presented enough reasons currently for it to achieve this or that Microsoft is too well equipped financially to match their move for move.
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