Microsoft just has some advantages. Essentially most people use their tools on Windows (DirectX with all included VisualStudio goodness) and they use the same (or similar) stuff for the 360.
Whats sad for the PS3 is that there are not as many PS3 only developers as there were for the PS2. Naughty Dog and Insomniac prove that this results in some of the best-looking games of this generation. Microsoft just has an edge in the multiplatform world because they are so close to PC gaming.
Besides we shouldn't forget 360 developers had 2,5 years to get to know the system. PS3 developers 1,5 years and every high-profile game that wasn't ported as an afterthought (I am looking at you Valve) looks just as good on the Ps3 as on the 360.
And for the statement that Unreal3 will look just as good on the 360: The same studio did Gears1 with the same engine. It would be pretty bad if they had problems porting a game..
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