That's true... the new matte D-pad on recent DS3 have been giving some calluses to some friends playing fighting games..

If L2 and R2 are going to be trigger buttons, it might be a little easier if they were thinner.

Other than that, do not change a single thing. There is absolutely nothing wrong with the analog sticks, and more importantly, the positioning of the analog sticks and d-pad.

For those saying the d-pad and analog sticks should change spots, that is 100% preference. As somebody else has already stated, I personally have found the positioning necessary for the Xbox to be very awkward. Once again, 100% preference.

L2 / R2 should be actual triggers
The joysticks should be concave
The grips should be larger and more ergonomic

That would pretty much make for a perfect controller.

Except for the god-awful directional pad and hard, round, analog face buttons. Also, I should have specified, curved like triggers, not actual triggers. I find the 360's triggers blister my fingers faster than anything else since the Dreamcast controller. Also, asymmetrical joystick placement makes no sense whatsoever. Overall the 360 controller is like a 3/5, it needs far more work than the Dual Shock.

Edit: I forgot to mention, I hate the super smooth plastic that the 360's joysticks are made out of, why not use a rougher, more porous material like the DS3?

Leave it basically the same, improve the response of the triggers (it should react later and then should offer more a bit more of restistance (so that you don't hit involuntarily R2/L2 when you place it on a table)) and make the plastic around the sticks a bit more sturdy...

I guess it's a matter of taste (duh). I have used both and find the smaller shape and overall layout of the DS to be slightly uncomfortable. Oh well...

And as for the joystick material, I prefer them smooth :P

Hence why I stated that the DS3 is too small and not ergonomic enough. As for smooth joysticks, my fingers slip off of them occasionally which drives me mental.

Hmm... That never happens to me with my 360 controller despite them being very worn out. It does happen frequently with my 3DS though. Most idiotic design ever!

An upgrade to the DS3 is all that I would change.  

I would add to L2/R2, a curved piece of plastic to the ends like these (just built in so they do not stick out).  I use them and they are great, just would rather them be built in.  

I would not change the button layout.  Regardless of the fight for supremacy (Sony and Symmetrical, MS and Asymmetrical), Sony should stick with what has worked for them.  

An upgrade to the Analog sticks would be nice as well.