PS3. Most objective observers will tell you that the 360 has been waning for a while now, while the PS3 has been surging and getting better and better each year. 360's are far less reliable than PS3's, and now that they're focusing all of their time on Kinect there are barely any new and exciting exclusives going to to that system.
I don't see that there's any real argument for the 360 at this point unless you're a Halo junkie.
This is just one person's POV, and a decidedly fanboish one at that. <_<
Look, I own both a PS3 and a 360. Both are great systems, but it depends on your needs as to what you should get.
If you want to predominantly play online, then the 360 is your system. If you haven't procured a Blu-Ray player yet, then get a PS3 to save shelf space.
-Both systems have pay online services (Xbox Live/PlayStation +), and while folks can play games online for free via the PS3, many features (cloud storage, cross-game chat) are going behind the paywall. The endgame for all of this is ultimately online play itself will go behind the paywall.
-3rd party titles (read: not from Microsoft or Sony) tend to be slightly better on the 360, as it's an easier machine to code for. The gap is closing, but it's still there.
-Sony has good 1st party titles (Uncharted, MotorStorm, God of War) and quite a few mediocre ones (Gran Turismo, Resistance, Killzone). Microsoft, while they have been focused on the Kinect, still has strong first party titles: Gears of War, Halo, Alan Wake, and Fable (except 3) are all excellent titles, and the Forza series has dethroned Gran Turismo as *the* driving simulator to own on the market.
-As for the Kinect, it's actually quite fun. Kinect Sports, Dance Central, Children of Eden are all great Kinect titles, and they have great exercise and kids titles (if you need to sell a significant other on your purchase).
-Sony has their version of the motion controls, but it's pretty much what the Wii has. Unfortunately, it seems like the Wii does this better, despite having crapier graphics.
In the end, you won't go wrong with either system. Both of them have their strengths and weaknesses. Just get one and enjoy.
Have had a couple friends tell me that they have had to get their PS3 sent in for repair, is that a common thing?
It's becoming more common with the first generation PS3 units (the ones with the Piano black finish). It's called the 'yellow light of death' or the 'pink screen of death', as you'll get one or the other. The root cause is the early Blu-Ray disk players in the systems are crapping out, and it's happening more and more as the early PS3s age.
Granted, the PS3 problems are not nearly as bad as what the 'Red Ring of Death' on the 360 was back in '06-'08, but both companies have revamped their systems and both are fit for purchase. Again--either way, you'll be fine.