I have a first gen 60gb PS3. I love it. Its never crapped out on me, plays ALL my old games, PS1 included. Plays blu-ray. It was definitely worth the price when it came out. Blu-Ray movies are just so much better than dvd. (Ive got the whole Die Hard collection on Blu-Ray
)
Ive known several people whos 360s got the red ring of death, one of them just got it this last weekend. I know two people with 360s that work fine. Keep a few other things in mind though.
The 360s online play cost monthly.
The PS3 online play is free.
The 360 is a microsoft product... they gave us vista
The PS3 is a Sony product... they gave us... the PS2 and PS1
Look at what kind of games you want:
If you want lots of action shootem up college frat boy games like gears of war, then the 360 is your machine.
If you want anything else the PS3 is your machine. I absolutely LOVE little big planet. Is so **** cute. It has plenty of shootem ups if thats your deal with Haze, Socom, Resistance 2(AWESOME). I love fighting games so naturally I picked up Soul Caliber 4, with the PS3 you get Vader (hell yeah!) you can download yoda if you want.
In the end its all up to you. Im a Playstation fanboy if you havent noticed. Im also a computer technician which is probably why Im so biased against the 360.