Personally I would choose the 360. I own a 360 and I love it.
The 360 is less expensive than the PS3, and has way more games. Plus it has the best games available right now, for example; Gears of War, Oblivion, Saints Row, Halo 3, and much more. The 360 has the biggest online gaming community, and you can play online with people around the world, chat with them, download demos and game videos in the marketplace, and buy Xbox Arcade games. At $50 a year Xbox Live makes up for its price. You can listen to music and watch dvds on the 360. And the 360 has great graphics and smooth gameplay. While many people experience problems and "The red ring of death," I have never had any problems with my 360. On the premium xbox package it comes with a 20 gig hard drive on the elite it comes with a 120 gig hard drive.
First off, I don't have a PS3, I'm saying this from what I've hear dand seen about the PS3, but i'm no expert. The PS3, is about 100 dollars more, it doesn't have many games and some of the games it does have are available on the 360. PS3 also has an online gaming community as the 360, which is free, but it doesnt' have all the great features. Probably the biggest Pro on the PS3 is the Blu-Ray dvd player, whihc enables you to watch blu-ray dvds. The 360, you have to buy an add-on which is $200, but it is only for HD-DVD, and not blu-ray. You can also listen to music. The graphics are probably better than the 360. You can buy a PS3 with a 20 or a 60 gig hard drive.
Hope this helps, It's up to you to decide, but my opinion is that you should get a 360.