lol my friend also did the same thing and he regrets it.... I really dont get why you wouldnt want a ps3  instead of a blu-rayplayer.... :P

I can understand getting a standalone Blu-Ray player over a PS3. A PS3 is much more bulky. The PS3 Slim is still like 7  plus pounds. Wouldn't look as nice in a home entertainment center. Considering that your $200 setup includes speakers, I'd take it that you'd probably end up spending up to $200 extra if you went the PS3 route. If you're not keen on the PS3/Xbox 360 multi-plats and PS3 exclusives that much, then yeah it's probably best to save your money and buy only what fits your needs. I've no clue about what your Blu-Ray player is capable of though. For me, XviD and mkv playback is the most important thing for a media player. I tried Netflix free for a month but then cancelled because netflix.ca doesn't quite have the library I want and I can pretty much just pirate the movies and tv shows I want to watch for free (lol). If I entertained guests more at home I'd probably see the $8/month for Netflix streaming as a worthwhile investment.

I set up Windows Media Center on my PS3 but I still have to iron some things out. For eg. My PS3 won't stream a lot of my pr0n videos properly (many of them are .flvs and .mp4s downloaded from streaming sites. But I also have XviDs). Honestly I basically just hook up my laptop to my display via HDMI. Nothing beats a PC for video playback. Though it's not exactly an ideal setup for an entertainment centre to hook up my laptop. Unless I can figure out how to get my laptop to stop going into sleep mode when I fold it and get some sort of media playback remote that is compatible with my laptop (as well as the video playback apps like VLC Player). A friend of mine recommended TVersity for PS3 so I might try that.

Does the PS3 have speakers to go with it?

The player has some sort of Internet functionality. Have not figured it out yet what I can do with it.

For some time I considered stuff like Apple TV, but that has only 720 p (or however much that is).

Nope.  But if you can afford it, buying separate speakers for an entertainment system is always the better route.  Congrats on the purchase though.  10080p and uncompressed audio makes an awesome combination.

What did you specifically, buy BTW?

Don't even think about Apple TV.....

Netflix is far superior, has a few shows/movies in HD, hundreds of devices can connect to Netflix, and is about 10 dollars a month with 1 disc out option.

If its one of those Home Theatre in a Box setups, its not the best choice,  but the PS3 isnt the best Blu-ray player for the money anymore.

You can get great Blu-ray players in the $150 range.   

Congratulations!

I did a similar thing about a year ago myself. My debate was cheap Blu-ray, PS3 or full 3D Blu-ray (with 1.4 HDMI), and I went with the cheap Blu-ray.  It's really nice to enjoy movies in 1080P and 5.1 (or 7.1 if you have it) surround sound on a nice speaker system.

Plus if you can stream Netflix, Pandora, etc. through your Blu-ray it’s a nice way to enjoy entertainment without collecting a whole bunch of plastic.

I would encourage you to upgrade your Netflix to the Blu-ray option.  There are many films I want to watch in HD, but very few I need to own.  It’s a little bit nicer than the 1080P you get on Zune.

Also, I hope you have a TV that will do 24P!  It smooths the picture out and a delightful way.

The AppleTV is restricted to Apple file formats and highly linked with iTunes, but it works if you have Macs. My sister's got one and it's easy to use but limited (the youtube section works good).