I'd say that the PS3 and 360 are more or less equal in potential graphically. The PS3 might be able to slightly edge it, if properly leveraged, however in practice they are more or less even.
There is no doubt the PS3 could support more CPU centric gaming elements, there's little denying that on a number crunching basis it can outperform the 360, but few games seem to be trying to push this further. I'm talking about the same visuals but having far more CPU intensive AI or physics.
Overall the PS3 has seen the slightly better games visually, however as I've said before this is most likely because it has received the most console specific engines/titles.
Only a few titles on 360 have truly custom engines, most use multi-platform engines and ironically due to its easier to leverage architecture in most cases 360 versions of titles tend to slightly edge (I mean very slightly these days) the PS3 version.
Cost of development is a barrier as well, so I expect to see continued focus on the SDK and methods of reducing this.
Also, the PS3 does have a slight advantage with BR over DVD but again this has only really reared it's head on a few occasions. However I guess it remains a potential advantage. Again though, only exclusives will really take advantage of it. Both Rage and FFXIII for example, were clearly designed with 360/DVD in mind and had elements of their gameplay changed from what BR could support to something more suitable for DVD environment.
I think Forza 3 looked good as a 360 custom title, and Alan Wake is looking very good too. Mass Effect 2 and Gears showed just how well Unreal Tech can perform on 360.
However, with the custom engines driving Uncharted and Killzone, GT5, LBP, etc. the PS3 has seen the better visuals/physics overall so far I'd say. However we're not talking huge differences. Sure, Uncharted 2 and Killzone 2 are the benchmarks for consoles right now, but they're not that far ahead of Gears 2 or Mass Effect 2.
Try to be reasonable... its easier than you think...
