I guess it all comes down to what it is you're looking for in a gaming system. True, the PS3 does have it's online gaming free, comes with a blue ray player, and is made by Sony. Personally, I hate all things Sony, and have had nothing but bad luck with that. Still, Blu-Ray is a Sony designed product, so they have all the cards in that arena. The drawback to the PS3 is their limited number of exclusive games. They have less than a 3rd of the exclusive games that Xbox 360 has. Now, I haven't played anything on a PS3, but have on the PS1 and 2, and have always liked my Xbox and Xbox 360 better.
If you're not into online gaming, like me, then I'd say go with the 360. Yes, in the beginning, Microsoft had a huge problem with the Red Rings of Death. It was caused by a powerful processor chip that was too strong for the cooler. It caused the system to overheat. They have fixed tha problem by upgrading the processor and motherboard. The newer generations of the 360 are not having that problem anymore. At least, not as much. If you keep it covered up or the vents against a wall, it is going to overheat. You have to give it room to breath! For me, online gaming sucks because I don't play 20/24 hours a day, and I find most people that play some of these games online do so for WAY too long. I can remember playing CoD MW live one time, and got pissed because every time I would spawn, I'd get instantly shot in the head. That's because people find the Spawning point and do that on purpose just to raise their stats. That is NOT fun for me. I'd rather complete missions and play the game on my own. I use my Live mostly for downloading updates and such, and that part is free. There is no charge for the basic (Silver) package. Plus, Xbox 360 has a ton more games exclusive to their console than PS3.