I've used both a 360 and a Wii on my setup quite a lot, and I'd say that while dolby digital 5.1 has more potential for accuracy of sound and positional accuracy than PL-II, PL-II is good enough that it really comes down to individual implementation. Some 360 games have very good surround -- better than the vast majority of Wii games. But there are some Wii games with fantastic surround sound as well (SMG is one).

I'd say the differences are about the same as the differences between high bitrate DTS (1.5mbit) and dolby digital 5.1. DTS is quite a bit better, but you need a really good track to realize the difference. And well implemented DD 5.1 is pretty damn good. But some of the HD-DVDs I've watched have better surround than I've ever heard from standard DD 5.1.

Also, I would not recommend using PL2 with an unencoded stereo source.  Any unintended processing you do on a source will change it, not increase the quality.  With my receiver, anyhow, I find that unencoded stereo (radio, CD audio and if I'm feeling like slumming it, MP3s) sound much better in standard stereo or "direct" modes.

The PS3 supports DD+ 7.1. The 360 could support it but it won't happen since it would only be the HDMi 360 that used it and the storage requiremnts are very high.

Do you know if any game has taken advantage of the PS3's 7.1 cpabillities, and if so, how the out come was?

I'm not out to defend PLII or say it is comparable to DD, as I really have no idea.

I'm am actually interested in comparisons of the two through first had anecdotal evidence, as this is my first foray in to the Surround Sound experience.

Just looking for some comparisons and what people have experienced with both.

There are a few big differences I notice between PL II and DD 5.1 (my stereo system is 5.1 and ran me about $1300 or so... it's been awhile since I set it up).

The subwoofer is a pretty big difference. 5.1 does a much better job of utilizing the sub for really deep sounds.

Positional sound is a HUGE difference. In PL II, it's a rough estimation of where the sound is originating. In 5.1, you know exactly where the sound is coming from and it helps a lot when playing epic-style games with massive battles going on around you (CoD4, Halo, etc.).

Overall, sound clarity is quite a bit nicer in 5.1 but that's likely due to the optical cable I use for 5.1 vs. the RCA jacks in PL II. It still annoys the shit out of me that Nintendo didn't include a $2 optical port in the Wii for those of us who actually spend a little money on our sound systems.

 The only 2 ps3 games to my knowledge running 7.1 so far are Lair and Uncharted, haven't tried lair, but OMG UNCHARTED XD. I'm a die hard sucker for uncompressed audio :3