I think if Sony can't figure out how to drop the price on the PS3s, it's gonna end up like the Sega Dreamcast. But that being said, it *is* technically superior and has everything you can get on the Xbox for less without all the bugs. (assuming you buy the WiFi, HD-DVD, etc for the Xbox)
Personally, I've waited so long I'm just going to get what all my friends have, Xbox 360. But I'm going to wait until the following happens: The DVD drive doesn't scream like a banshee (I literally have to turn up the volume to drown it out), RRoD issues (65nm CPU cores), and HDMI cables (which has been met now). Supposedly all those are going to be fixed when the fabled "Mr. Falcon" edition comes out this holiday season. But whether you not you'll be able to tell which is which is another story. Oh, one more thing that would be really nice on the Xbox is built-in WiFi. I can't for the life of me figure out why M$ skimped on that. It's like 5$ chip OEM.