The PS3 is a joke.
The $500 dollar system doesn't allow for memory cards, doesn't have Wi-Fi, and doesn't have an HDMI slot, so that Blue-Ray HD viewing won't be viewed how it is intended. Not to mention the 20 GB is internal so you can't take it to a friends house, and with no memory cards you're just screwed.
PS3 steals Nintendo's controller feature, gives many less HDMI input and less then half the USB inputs they claimed. XBOX360 now has the the same rights to GTA series plus a little bit more in the series then Sony. Through in the fact that the Xbox360 will have a ton of games out compared to the PS3 by the time it is released. The PS3 pulling off the dual release in the U.S. and Japan, will spread themselves very thin also. Sony with the new blue-ray technology will suffer extreme shortages in the U.S. and as JWins said PS2 had a failure rate at launch that is very comparable to the the poor Xbox360 release.
I'd rather buy a Xbox 360 AND the Nintendo Wii for gaming for the SAME price as a PS3 by itself.
Also the PS3 free online gaming... that'll be a big joke, just like all there other prehype promises, notice they didn't talk about the online play during the press conference, it won't be any good or it won't be free. They made similar online claims for the PS2, that turned out real well. AND you should expect to see XXbox live go free in november. Microsoft purchased a online advertising company that will implenent ads into the 'live' feature. With a banner or such running at the top for free service, or for a price have live without the advertisements (Note the free Live is very likely but not confirmed)
If you don't own or expect to own a 1080P-HDTV and pick up a PS3 at launch you're a fool.