I'll go against the grain and say that I bought it on the 360 despite having a decently spec'ed PC.
There's a huge appeal for me in being able to sit back on the sofa or even lie on my bed after a long day at work and a hard session at the gym and enjoy shooting at ragheads in widescreen and surround sound.
I do prefer mouse + keyboard for FPS effectiveness but by using a controller you aren't at a disadvantage on the 360 because everyone else is using one too.
Played the demo on the PC and it ran crap on my computer, unless you have a top spec computer it is pointless on the PC but the days of me upgrading have gone, I bought it for my 360 for £30, it runs great, online is very smooth and lag free and to the people who say M+K is better than a pad either can not play with a pad or just a fanboy imho.
I can't game like that anymore, I lose interest very quickly, especially with shooters. Can just about do it with FIFA.

I know this is a PC website so I am aware I may get bias opinions but should I get COD4 for the PC or 360?
Which format is better & does the PC version carry DX10 compatibility?

You don't need a top spec PC at all.
Mouse & Keyboard are better though, you ain't gotta be a fanboy to say that!
Online may be lag free but the flaw is it's p2p so it could very well not always be lag free even with the smaller player count.