wow, I've just spent an hour reading the last 10 pages. There are a lot of rivalaries here. So i guess i'll add my 2 pence.
Now don't have a PS2 or original Xbox so there is no back catalogue games to push me either way and frankly the decision of which next Gen consoles I will get will base on....
1 - Games, the only reason I got a PS1 in the first place was Final Fantasy 7. I didn't get a PS1 until FF7 came out. However, by that time the PS1 was at £120 ! If the PS3 will be sub £200 when FF13 comes out then i might consider it. I will not however pay £400 for it plus £40 for a game. Now i haven't got a 360 yet, mainly because I don't have £300 knocking around but if i did, i won't get it yet because there's not a game on it i want to play yet. PE6 do look fun but i think that's about it, there's no must have game. Gear of War has been praised a lot but its still just another FPS, I have yet finished HL2 yet so i don't expect that to be better than HL2. When there is an game like FF7 comes out, then i'll jump on a bandwagon.
That's it, personally I don't give a rats ass it has BluRay or not, its quieter, looks better next to my TV (subjective), or even feels solid in the hands (like I am going to pick it up and stroke it). If i want a next media player to watch films, I would get a dedicated player. I never got a PS2 to play DVDs, i got a DVD player instead. I guess most people would, people who go into a shop looking to buy an DVD player in the past wasn''t told by the saleman to get a PS2. I don't see why this time people will go out buy the PS3 base on the BluRay either.
Sony's fate is not all doom and gloom, there is a huge Playstation Fanbase and fanboys out there will buy it no matter what. They'll be blinded by the badge and convinced themselves that the price tag is justifed with all the extra technologies it has inside, which by the way, if BluRay fails in the format wars. It'll be funny, it's like you are forced to have Betamax when everyone else can choose to get VHS. If the PS3 can release their core games like Gran Turismo, Final Fantasy and more first rate "Exclusive" games before next Christmas then it might succeed. If all it releases are the same cross platform games that you can get on the 360 then forget it. I'll pay less to play the same game on the 360. I can live with another White box, the noise and even the fact that it is made by Micro$oft. Because I am not paying the extra £100/£150 for the Sony badge or the BluRay Format.
Wii on the other hand, I am certain to get when I can get my hands on one (I already got a Wiimote

) since it offers a different style of games to the other 2, I will have it alongside either an 360 or PS3. Which to be decided in the future by its games. I also think Nintendo has been really clever this time round, they knew they couldn't win by processing power alone, guess they learn with the N64. So they went in a slightly different direction and knocked one out of the park it seems. Sony and MS can fight over who is better, but then now people are getting a PS3 or 360 with a Wii.
I do want the PS3 to succeed, competition is good, competition drives the industry on. If all we are left with are 360 and Wii then god help us, the market will get stale and the ultimate losers will be the consumer.
p.s. to the OP, I do think the 360's graphic looks better as well. If the same games comes out on both machines, i would get it on the 360.