My brother asked me the same question about a week ago. Basically, Homedad's answer summed up my own.
I wasn't sure about the 'current' state of the 360's reliability issues but after a lot of scanning of newsgroups, the 360 is much improved but still appears to be much more likely to have reliability problems than a PS3. Cooling can still be a factor with the 360 as well. The PS3 seems much more solid from the number of supporting comments out there.
General consensus was also that 360 has more, maybe even better, games but also the trend is shifting more towards having most games, except for a Console's 'trademark' games, coming out in multi-platform now.
PS3 with Bluray can be a huge factor for you or a total non-issue, depending on your intended use. Both can stream music & video and have access to downloadable games, TV and movies. XBox has the very popular Netflix service, unless you are in Canada.
The Wii has a very high novelty factor with it's movement sensitive controllers and the best price point. However, the graphics are VERY weak compared to the other two big choices and games are therefore purposefully "cartoony" as they can't develop for realism. I's lower processing power keeps the games more simplistic and some claim the novelty of the motion involvement wears out quickly as the games don't have the depth to go along with it. Others claim it's addictive. Again, probably a personal preference.
That being said, RockBand and Guitar Hero are no longer missing donwload functionality on the Wii anymore and Mario Cart is a super inexpensive way to get into a driving wheel and a genuinely fun game. And of course there is always the beckoning hope that eventually they will really come out with a Starwars game using Lightsaber controllers.
I personally went with the PS3 because of Bluray as I am a realy just casual console gamer (Ok, I admit I do play a fair bit of Rockband). Therefore the reliability, Blueray and it's at least equal ability to stream from my PC's music library were my main value factors. If I was a more active gamer, it might have been a more difficult decision.
Hope that helps.
Oh and also, I hear the Wii is already almost impossible to find around here this Christmas season. Not sure how far out that extends.
