I keep reading articles about how the 360 is dead and the PS3 has been annointed the new king.  That's pretty interesting given the amount of negative press the PS3 got last year -- but I digress.  That said, the 360 still has a fairly significant lead over the PS3 and it's going to take quite a bit of time for the PS3 to catch the 360.  Just for grins, I pulled the data from the total sales data worldwide from Dec 1 to March 29 from this site.  The PS3 outsold the 360 by about 800K total consoles worldwide during those 4 months.  That means about 200K/month on average which is pretty significant.  Assuming a 200K/month average will hold for the next couple of years (expect that MS will do what it takes to keep the difference from getting out of control...), We are looking at 2.4 million units per year.  Given there is a current difference of 6.45 million consoles, we are STILL looking at a little under 3 years for the PS3 to catch the 360 or in terms of date, I would expect it around holidays 2010.

There are a few things to consider.  By 2010, I suspect we will start hearing rumblings of the next-gen Xbox assuming they are going to participate next gen.  The install base of both consoles, assuming sales follow the above pattern to some degree, will be somwhere in the neighborhood of 35-40 million consoles (and tied).

With that many consoles, developers aren't going to stop making games for the 360 -- quite the contrary.

The PS3 may, in fact, win the overall hardware race this generation, but if it does, it is going to be MUCH later in the generation than before and the number of installed machines from competitors would be significant and mean they will never completely dominate like the PS2 did.

Give the above assumptions (based on current data), I would hardly call the 360 dead and/or annoint the PS3 the winner of this generation.  Obviously if either console makes a major move in terms of price, it will likely skew data quite a bit and all this goes out the window...

Feel free to comment on my assumptions/thoughs, but please check your fanboyism at the door. 

Keep in mind that I'm intentionally ignoring the Wii as I still don't consider it to be competing for the same group of gamer's dollars.  Clearly the Wii is well on its way to destroying both the 360 and PS3 in terms of total install base. 

one year lead, but the ps3 will catch it late next year wanting it or not.

May I point out that any gaps between them will be extrapolated at the holidays, as they will probably both increase by the same percent, meaning the gap is greater.
There is also the large boost from MGS 4, huge from GT 5 and huge from FF XIII. Also, PS3 sales in Japan are awful, and so will only get better. Of course to counter that, there is the upcoming 360 US price cut, which will boost sales there, but the combined might of R2 and KZ2 should stop the GeoW 2 boost being that great, and generally (as shown by games like J & D, DMC and FF X - XII) sales of a franchise seem to decrease over the lifespan of a platform, likely (especially so in this case) the original was so good that it got everyone who wanted that type of game onto that platform

You seem to be forgetting the boosts the PS3 and 360 will see from the games that are going to be coming out (the PS3 being the obvious one to benefit the most from the AAA games coming since it has the smaller userbase) so i would assume that the PS3 overtaking the 360 will happen quite a bit sooner than you have predicted!

They are both doing well, so i don't see the need for these constant sales comparisons! Neither console is going anywhere!

their price cut so far has worked greatly, huh.

Looks at sqrl's data to see the massive difference the PS3 price cut made

I feel that timing and calling each a generation will be thrown out the window bc the timing is going to be off. That there will not be any more specific gens. I believe though that the PS3 will pass the 360 by this time next year thou. 360 Doesn't have major system seller games and by the end of a consoles third year they mostly have hit their max year selling amount.

Your assumption (as is everyone's lately) is that the PS3 will never increase the pace in which is catches up hardware wise, and that is the key to these calculations.
I personally expect the gap in weekly and monthly sales to widen every month throughout the year and next year, so in reality I think its fair to assume that the PS3 will catch the 360 in lt total sales somewhere around 1st or 2nd quarter of 09.
Steps or not, there is precious little MS can do (as we've clearly seen this gen) to maintain or elevate sales outside of NA and the PS3 is growing fiercely in these regions in addition to the NA market.
I believe that the 360 is nearing its sales peak, whereas the PS3 still has quite a climb ahead of it before the same peak is crested.

Of course; many users will dismiss this (and other posts in here including the OP) as fanboy wishful thinking or the rants of immature children, but the numbers speak for themselves.
I would also like to add that I don't own any of the current gen consoles and spend 90% of gaming time on my PC.

Your not taking into consideration boost's from software releases,price cuts, blu ray , home .

If you compare the amount the PS3 and 360 have sold in the same time frame you'll find the PS3 has sold quicker , it sold 10 million quicker than the 360 and continues to outsell the 360 week on week , if the PS3 and 360 would have launched simaltaneously world wide it wouldn't have stood chance.

And it has managed to do this well with comparably worse software support than the 360 , once the big names arrive MGS4 , Killzone 2 , LBP etc etc it's game over for the 360.

You have to take into consideration Japan , the 360 has little to no potential to sell in this region , With the release of MGS 4 , Siren possibly LBP and then Final Fantasy next year the ps3 probably won't challenge the Wii too much but it should help it double it's userbase in japan.

in Europe the PS3 has consistently outsold the XBOX 360 since the begining of the year , even with a major price cut (£50) before the easter holidays the 360 still couldn't even manage to overtake the ps3 for a week.

The US is where the biggest challenge for Sony is however they're '08 line up is very westernised and has games that apeal to the american gamer , GT5:P coming out soon , Haze , Killzone 2 , Socom , MGS4 ETC ETC.

Quote me on this if you will , there's no way the PS3 wouldn't have overtaken the 360 by christmas '09 , the '09 line up is looking potentialy stronger than '08 (God Of War 3 , Getaway , Final Fantasy = Game Over).