As I have both systems I can easily tell you the difference.
PS3
Graphics seem better, Playstation Network is Free, Blu-Ray Player, Wireless Built In, Controllers are better on PS3 as battery is built in, Motion Sensor in controller. Quieter in terms of fans and playing games.
Xbox
£14.99 3 months Xbox Live Gold, Wireless Adapter £50, Cannot play Blu-Rays and can only player HD-DVDs which are being phased out, Controller Battery looks and feels horrible on the bottom, Controller seems to be built better, Backwards Compatibility with Xbox games, It is also quite loud when playing a game and the disc is spinning.
My Xbox is currently on the floor on a towel to tone down the noise going through the house but I can still hear it downstairs. Xbox seems to be more sociable as the Elite comes with Headset.
Personally I will always prefer the PS3 BUT READ THE NEXT BIT:
Project Natal Due in 2010
This is something Microsoft have been working on for years and it could blow all other games consoles out of the water. It is a motion sensing bar with camera and Microphone with a virtual world game. The game is like a little boy in a virtual world and you can talk to him. It can detect the tone of your voice and notice what sort of mood your in. You can also make the kid a drawing which you can "Virtually" pass to him and it will read it and recognise it.
GO TO THIS LINK AND WATCH THE SECOND VIDEO:
BBC NEWS | Technology | Microsoft unveil new controller
It is a fantastic piece of kit and judging by the amount of time Microsoft are taking to produce it I don't think they are rushing it so it should be fantastic.
That video is quite old but Project Natal is due to be released this year at some point.