On nearly every level, I'd recommend the 360--especially over the PS3. Why?
1) Games. First and foremost, it's a gaming console, right? The 360 has 11 games rated 9.0/10 or higher on metacritic or gamerankings. The PS3 has 3.
Of the 11 on the 360, 4 are exclusive. Of the PS3's 3, zero are exclusive. Of the PS3's 3, 2 are higher rated on the 360--and the third one is tied.
All of the highly anticipated PS3-exclusive games have fallen flat (Lair, Heavenly Sword). Uncharted: Drake's Fortune is a good game, but like Heavenly Sword, it's less than 10 hours.
Whereas I absolutely love the 360 exclusives: Gears of War, Mass Effect, Halo 3 is pretty fun, GTA4 is going to have exclusive episodic content, etc.
2) Overall, I prefer XBL to PSN--the digital download offerings are much better, I enjoy the achievement system and unified gaming network. Yes, you have to pay for XBL. However, my cell phone bill for a single month is more than XBL's subscription for an entire year..
The statement that "Blu-Ray won the format war" is misleading. It won the war against HD-DVD, yes. But DVD has a commanding presence in the market; and I really don't think the jump in quality will neccesitate DVD's replacement with Blu-Ray before digital downloads become the primary method of distribution.
3) Multiplatform games often favor the 360 for numerous reasons. A few developers have said that Sony's software-developer-kit is hard to use, and that the Cell processor's proprietary pseudo-thread coding is difficult and unwieldly. The 360 also has 512MB of flexible RAM that can be dedicated either to the CPU or GPU whereas the PS3 has 256MB of each that can't be moved. Also, the GPU in the 360 is (again, tech specs, like the Cell processor) superior to the PS3's. For whatever reason, more than a few multiplats have gotten superior ratings on the 360 side and there are a few (like the Orange Box and Lost Planet) that perform poorly on PS3.
The 360 RROD issue is highly, highly overexaggerated. Mine is a post-launch (1 year) console that has performed flawlessly. My roommate's 360 did get the RROD, but got it back within two weeks and like someone previously, got a free month of XBL and a leather game carrying case, and none of my other 360-owning friends have gotten one.
And we're more than a year after launch, and there have been no hugely successful games on the PS3; no must-haves. All the super-hyped games (MGS4, FFXIII, LittleBigPlanet) have been endlessly delayed and lots of exclusives (GTAIV, Devil May Cry 4, a few others) have made their way to the 360.
I think both systems are worth having, but if you HAVE to choose one over the other, I'd get a 360 unless you're an absolutely die-hard Final Fantasy or Metal Gear fan (and even previous MGS games have made their way onto GameCube/Xbox) and Square Enix is making games specifically for the 360 (Infinite Undiscovery).