Unless PS3 goes to $300 in 2008 or earlier, it will have no chance in this gen. There is no reason why MS and Sony can both have multiple SKUs and Nintendo can only have one. I think that Nintendo will have an HD enabled Wii SKU by 2009 (when the format war settles or the multiformat reader becomes competitively priced (as in <$100 wholesale). So, if Sony doesn't drop to $300 by 2008, when Nintendo comes out with an HD SKU, the game will be over. It will have the install base, support for HD for those interested, and maintain low price and form factor.
As a consumer, Wii is just the best choice now. It's got an interesting interface, buzz, and low price. It can easily tide me over until it somehow (magically) have no games coming out for it and I have to buy a 360 or a ps3, but by then they will be $300 or less, so I would have paid less overall than getting them now and wait for the games while it depreciates. By then, I might opt for the Wii HD anyway 
