Their dominance over the JRPG genre is tenuous at best considering its pretty much all timed exclusivity. You will be able to get solid JRPG games on the PS3 starting this Fall with Valkyria Chronicles (exclusive), Disgaea (exclusive), and Eternal Sonata. Early next year, the PS3 will get the Last Remnant. The 360 does have Tales and Infinite Undiscovery, but the point is that it appears Sony and MS are sharing the JRPG throne just like every other genre. The only thing MS has won is the allegiance of the most hardcore JRPG gamers, which you can't honestly say is a huge segment of the population.
My Top 5:
Shadow of the Colossus, Metal Gear Solid 3, Shenmue, Skies of Arcadia, Chrono Trigger
My 2 nex-gen systems: PS3
and Wii 

Prediction Aug '08: We see the PSP2 released fall '09. Graphically, it's basically the same as the current system. UMD drive ditched and replaced by 4-8gb on board flash memory. Other upgrades: 2nd analog nub, touchscreen, blutooth, motion sensor. Design: Flip-style or slider. Size: Think Iphone. Cost: $199. Will be profitable on day 1.