1) If you are a gamer: the 360 takes the notch and it's really not a contest. Way more games and yes, they have some pretty good exclusive titles like Halo. If you are a gamer that can't do without Halo, Bioshock etc.. then 360 would be the logical choice. Within the next couple quarters however, the gap will be closer as there are some nice exclusive titles coming out for PS3 that have been taking forever to be released (MGS etc). Plus, major releases like Call of Duty 4 (which is by far my favorite game even after being a Halo fanatic for years) is available on both platforms. Xbox Live is much more robust but subscription based. PS3 Network is free and you don't have to hand over your credit card to anyone.
2) Quality of hardware: the PS3 by far. Although MS will swap your unit easily, I'd rather not deal with the BS to be honest. My original release 360 actually had no problems for a couple years before I sold it and got out of gaming but I had issues with how loud the DVD drive was and how hot it ran (although I hear some of those things have been addressed with newer consoles). Another really annoying thing about the Xbox is it's ginormous power supply! I hate it! It's almost as big as the console. Some complain that the PS3 is bigger, not by a long shot if you consider the 360 brick. PS3 has no external PS, just a cord. The Elite looks nicer in black, but Sony has always had an edge in hardware design and aesthetics. All the way down to the touch sensitive buttons.
3) Overall Out of the Box Value: since the price drop, the PS3 is much better value in my eyes. For one, it includes the Blu-Ray player, built in WiFi (which is a huge feature to me), can be used as a media streamer for music (as long as you use EyeConnect), can browse the internet as it has a built in browser, software is much cleaner and more attractive for the living room/media centre savvy like me (Xbox interface is arcade like/childish to me). If you added the HD-DVD and WiFi accessory to the Elite, it would be about $200 more expensive. Yes, the Xbox may have a bigger HardDrive, but the PS3 harddrive is self upgradeable with any aftermarket drive whereas 360 is not. I don't download enough content to even come close to filling up my 60GB drive anyways. Don't forget, BluRay gives you 5 free DVD's as well when you buy a PS3 (mail in).
So after selling my 360 a year ago, I got a PS3 after the price drops. No brainer to me. Call Of Duty 4 fulfills my small gaming needs. The Blu-Ray player (reason why I got it) is amazing on my 42inch 1080p panel (even regular DVD's look better for some reason). But again, all this means nothing if you are a hardcore gamer because if I were - I'd probably have the 360 right now.
As well, if I were a PC user, I may opt for the 360 as well. The Media Centre integration with Vista is unbeatable. You can use your 360 as a PVR basically.