Exactly. If people are using more entertainment apps then playing actual games, its cheaper on PS3 since it has free access.
Don't think Live has any TV shows available that PS3 doesn't have. 

But most peopel just get the console their friends have.

Would they be using your Xbox Live account? If not, it would be pretty stupid to have your family be paying for 2 Gold accounts a year.

No, free does not always equal best.
But paid doesn't always equal best either.

$350 isn't pocket change though...that's a lot of money for the middle class(the 99%) That money could be spend paying off bills.
If you're a kid then the parents will be less likely to pay a yearly Live fee. 

 A smart parent would get a PS3(talking 2011/12 here) since its cheaper in the long run.

Nope. I purchase a Family Gold Pack for $99 when I renew my account this past December. You get 4 gold accounts for the price of 2. I have one, my wife have one and my two boys have each their own.

Don't want this to be another Live vs PSN debate. 

As a father of three kids I don't mind paying for something if my kids will enjoy it with their friends. For example both of my boys have a PSN account but they don't use it rarely because none of their friends have it. A smart parent will get their kids something that all the their friends have so they don't feel left out of game time which my kids only get during the weekend.

$350 all at once definitely is a good amount of money but over 7 years it's basically a non-factor. In fact you can get that number below $250 for 7 years if you're a smart shopper. Basically there is no definitive or best way of choosing. Simply look at your needs, weigh the factors, and pick what best suits YOU.

A smart parent would get whatever console/device that best suits their needs (which seems to be Wii for many)

LOL, I'd sooner go with the Wii for my Nextflix and YouTube viewing than the PS3.

Even if you pay full price for an annual membership of XBL every year... that still comes down to just $5 a month.  Netflix all by itself costs $8 per month.

"Don't think Live has any TV shows available that PS3 doesn't have. "

Like what? Im pretty sure there is a TON of XBL services that PSN doesnt have. Heck, XBL even has a Crackle service. 

What about Fios? or HBO go? Xfinity? Comcast? UFC Live? MLB.TV?

Your like comparing Freeview to Sky. Lol

Guilty here too.

I have been using many of the streaming services, as I have some PT and then Ice for an injury. It's so helpful that I can just talk to it and it listens and does what I say.

The cross lookup of anything on Bing through Kinect is so helpful and nice. It is hard to express it without a demo. Basically, you say what you want to watch, a title of a movie, or an actor, tv show, etc. And it will look it up for you and show you where you can watch it. It's mega sweet. (Even better than a well utilized Harmony remote.)

I have a blu-ray, Wii or even my PC I can watch things on, but the Xbox is so much more convenient.

If I could ask one thing, it's to be able to control the volume by speaking too. (But that will probably have to be my receiver)

50:50 for me I would say.

I watch a lot of videos on Zune. For me this is the best VoD offering available in Germany. Simply because it is on the Xbox 360 and connected to my TV. The number of movies available improved a lot over the past 2 years. With Warner, Disney, Universal, Paramount, 20th century fox, constantin, MGM and many more you have all major studios supporting it, except Sony.

I will game more once Halo 4 is released

And $350 is not much at all. I am on my 9th year of Xbox Live Gold and it soooo worth it. By far the best service to play on (including steam and bnet!).