XBOX360 has better graphics but PS3 has 1080p resolution support (which XBOX360 lacks) so hence images are crisper than 360. thats why people say PS3 graphics are better. to enjoy both system you should have at least an HDTV with 720p resolution support (if on a budget) otherwise get 1080p input support HDTV (like sony bravia X Series). i have PS3 with about dozen blu ray movies. Its an amazing machine and future proof. i chose PS3 because of its 1080p resolution support, blu ray technology, builtin wifi, and HDMI ports.
XBOX has no HDMI ports. only 360 Elite now comes with HDMI port. all other lack it. Modern TVs with FullHD (1080p) have HDMI. and only accept 1080p input signals from a HDMI source not regular sources.
my recommendation for you.
if you like games, and dont want to buy games that cost Rs.4000 each then go for 360. But if you like movies and future technology then buy PS3. also remember games variety is not much on ps3.
and for both systems......inorder to njoy first buy HDTV (Sony BRavia series V or best is X) then buy sytem. otherwise system waste kernay walee baat hai. For blu ray titles (movies) or games you can contact me as i import both.