Which system should I get? Or should I get neither? Or both? There are advantages to both and I cannot decide...

Pros and cons of PS3

Pro

-Blu ray player would go great with me HDTV

-Remote play ect would go great with my PSP

-backwards compatibilty would be fantastic since I never had a PS2 (only had enough money to get GC) and there are 20 plus games I would like to buy for PS2

-reliable hardware

-lots of good games coming out in the future that I would like ex LittleBigPlanet, Disgaea 3, White Knight Chronicles, FF13, ect...

-free online

-lots of good games coming out this fall (disagaea 3, LBP ect) 

cons

-kinda pricey

-all my friends that have next gen consoles (about 1/2 of them) have either Wii or 360, so the free online would be meaningless for multiplayer gaming (though has other useful functions)

-most of the games I want are for PS2 or arn't out yet and I am uncertain how BC works for PS3- did it get taken out? 

-blu ray movies are pretty expensive

360

pro

-lots and lots of great games out RIGHT NOW- eternal sonata, blue dragon, eternall oddesy, halo 3, viva pinata, mass effect, Ninja Gaiden 2 ect

-many of my friends have a 360 so I could play with them

-I really like the controller (more than PS3 controller)

-Banjo Kazooie nuts and bolts is on 360 and I LOVE BK

-Good downloadable games like geometry wars: retro eveolved and Pac man championship edition

-lots of good games coming out this fall (BK:N and B, Fable 2, ect)

 cons

-kinda pricey

-future uncertain (in terms of a giant supply of good games coming to PS3 instead of 360, not in terms of console failing)

-extremly unreliable- though a 3 year warranty makes this an annoyance rather than a death sentence

-if PS3 manages to steal 360's future JRPGS I will be left with primarily a shooterbox which isn't what I am interested in (though some more are coming ex. infinite undiscovery)

-HD DVD=epic failure

Alternativly, I could buy a new PS2 for $130 and then just play games for systems I have, which would more than cover me. (I would have PSP, PS2, Wii, DS) For example, for PS2 alone I want:

Kingdom Hearts

Disgaea 2

La Pucelle Tactics

Phantom Brave

Kingdom Hearts 2

Final Fantasy 10

Final Fantasy 11

Final Fantasy 12

God of War

God of War 2

Ratchet and Clank

Ratchet and Clank: Going Commando

Ratchet and Clank: up your arsenal

Jak and Daxter- Precursor Legacy

Jak 2

Jak 3

Dragon Quest 8: Journey of the cursed king

Final Fantasy X-2

Valkyrie Profile 2: Silmeria

Odin Sphere

Ape Escape 2

Star Ocean: Till the end of time

Wild Arms 3

Wild Arms alter code F

Wild Arms 4

Wild Arms 5

Tales of the Abyss

Ape Escape 3

Tales of Legendia

Star Wars battlefront

Star Wars battlefront 2

Okami

Devil May Cry

Shadow of the colossus

Devil May Cry 2

Devil May Cry 3

We Love Katamari

Beyond Good and Evil

Psychonauts

..So, which should I buy? Or should I hold off until the fall for a potential price cut? Or should I buy neither and save my money to buy the 30 plus PSP games  I want to get (got PSP recently) and the DS and Wii games I am interested in?

Sorry that my OP is so long, it is a lot of money and an important decision to me :D

Buy a MGS4 ps3 for $499 (and sell MGS if you don't care for it) so it'll be about $450 for a 80gb ps3 with a dualshock 3. Alternatively, wait till ps2's go on sale for $99 and pick one of those up.

Just go for the PS2. It doesn't sound like you're dead-set on HD gaming, it doesn't sound like you're interested in the Western-style games that the 360 has to offer, and the PS3 only has a handful of interesting exclusives at the moment, so you're better off saving your money.

PS2 and a 360 seems the right choice for you. Adds up to about the same price as a PS3 if you a good deal.

You forgot you have to pay for the 360's online, and uh I'd just wait a while until E3 to make the choice. See which games interest you.

I do have an HDTV that I feel isn't being utilized by my Wii and DVD player, but it doesn't really matter. I also have another 30 something inch SDTV that I could play PS2 on this summer. When is PS2 going down to $99?
The MGS4 PS3 is BC right?

Between the PS3 and the PS2, I'd get the 80g PS3, just check the list online and make sure all the games you have to have are on the list which they should be.

Between the PS3 and the 360, its a tough choice. I don't think you have to worry about the 360 losing its RPG's though since most agree that they are money hatting them and I see no reason for them to stop that. I guess I would treat them as equal and go with the one with the exclusives you really want.

arcade 360 = half the price of PS3...

 I woudln't get online until the fall/winter of 08 anyway, so it wouldn't effect my summer gming budget.