It's the age old question, and I hate answering it. But I will anyway.

I have both, and both are amazing systems. It basically is down to preference.

I'll look at Xbox first. Firstly, and it goes without saying, it's online service is better. On Xbox Live, you get what you pay for. It's much more reliable, faster and you have more chance of getting into games because a lot more people use it. An example looking at this is Brink (of all games :/). On PS3, the community is dead, yet is still thriving on Xbox. Same with the likes of Borderlands, even newer games like Mass Effect 3.

Also, look at Xbox's games. If you are looking for awesome shooters, look no further. On Xbox you have exclusives like Halo, Gears of War, Left 4 Dead. It's also good for JRPGs, if you are into that. Here you have games like Last Remnant, Lost Odyssey. You also have the Fable series, Mass Effect and The Witcher 2. You also have the (arguably) better ports of games like Skyrim, Fallout etc. So if you are into that, go for Xbox.

Looking at PS3, you are looking at lacking online services, but they are free, with the option to pay for a better service if you want to. Although, what PS3 lacks in online capabilities, it is a more powerful machine. Multi-plat games, I think, always look better on the PS3.

Also, if you look at the games on PS3, I feel PS3 has better exclusives. On PS3 you get Uncharted, Resistance, Twisted Metal, Heavy Rain, InFamous. I may have bought my Xbox for its exclusives, but PS3's exclusives are undeniably better.

Also, controllers are definitely an issue here. Xbox controllers are definitely more solid, and geared more for shooters. For games that use the D-pad more, like Fighting games and more retro games, it is horrible. I find great difficulty playing the likes of Sonic on Xbox compared to PS3. PS3 controllers are definitely easier to use, but feel less solid. I don't know about anyone else, but I feel like I am going to break my PS3 controller if I press something too hard!

I think it mainly falls down to two choices here really. If you are looking for a multiplayer and community focused system at a lower price, get an Xbox. If you are looking for more reliable hardware, get a PS3.