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Agreed, the biggest drag with XBox Live is that for you to play online with friends, not only you will have to opt for paid subscription but your friends too!

But even if XBox Live would be free, I prefer the PSN. More good games are using dedicated servers for great performance. Even tiny 4 vs 4 battles in a game like Gears of War were too laggy for me, but with many exclusive PSN games 16 vs 16 battles are very solid (MAG even can do 128 vs 128 pretty well I'v read). IMO the exclusive content available on the PSN is also better like Super Stardust HD, Warhawk, WipeOut HD, etc.

With regard to user created content the PSN seems far more powerful (as some publishers said as well). For example the enormous amount of user created content available for LittleBigPlanet.

Then both services have some extra distinguishing features:

PSN: VidZone (viewing thousands of Music Videos for free, you can make your own playlists), Playstation Home (There are some nice places to visit, it's a nice additional option to get in touch with people with similar interests) or Life with Playstation.

XBox: Easier install process (good but not crucial for me, as a game is only installed once) and Party Chat (which is useless to me, if I really want to realtime chat with a person who is doing something else than me I could just keep on my laptop, but that hasn't been the case, cross game messaging in my experience is more useful and when playing the same game or sending an invite for a video chat IMO is enough).



Naughty Dog: "At Naughty Dog, we're pretty sure we should be able to see leaps between games on the PS3 that are even bigger than they were on the PS2."

PS3 vs 360 sales