Pure internal hardware wise the PS3 wins hands down, but the fact that Sony have decided to only make the 40GB version from now on is a plus for Xbox sales.
Sure you might save £50 (roughly $100) but you get 20GB less memory, only 2 USB ports for anything you might wish to connect to your PS3, no backwards compatibility. The online play isn't quite as well established as Microsoft's Xbox Live but its getting there, in the end it'd be best to look at the games which are exclusive to each system and decide that way. i.e
Xbox:
Halo
Gears of War
PS3:
Resistance: Fall of man
Heaven's Sword
etc |