I really don't get what all this discussion is about. Neither machine would qualify as a media center "in a vacuum" so to speak. Both are at most media extenders. I think people are being really loose with their definition of media center. In my case, here are the criteria I use and the way each machine ranks:
Archive Purposes:
One of the main reasons to have a "media center". HTPCs and other media centers are designed to rip, store, and replay various types of media. Of course there are three main types that most people use - still photos, videos (both home video and movies), and music.
Music: Both the XBox and PS3 provide ways to rip music to hard drives, so are both pretty equal in this aspect. Where and when you can play them (for instance, requiring that you be able to play them during game play) is more a function of a game console than a media server to me. However, the XBox does allow this so it gets a +1 in the "both media server and game console at the same time" category.
Video: Neither console provides meaningful ways to rip DVDs for archival purposes from the console itself. Both would not qualify as a media server in this regard. However, the PS3 can run Linux so can do some limited ripping. I would give it a +.5 in the media server category for this. It is not a perfect solution, but it is something. Depending on model, the PS3 can rip hope video straight from several popular camcorders. However, the solution is still not perfect. Give it another +.5.
Note that BOTH can use media that has been transfered to readable formats by a computer. So neither gets any bonus for that.
Still photos: Both consoles provide viewing tools, slide shows, and easy transfer for photos. Some models of the PS3 come with memory card readers so can read them straight from camera memory. Not all models do, so this cannot be used as a validating factor. It is worth noting here though that there are at least 3 features that are model dependant for the PS3 that would give it a serious leg up on the Xbox: SACD playback, memory card reader, and native HDMI 1.3. Only one version of the 360 supports HDMI natively.
The other aspect to the archival category is storage space. Here the PS3 has a clear advantage. The hard drives for the PS3 are not proprietary and can be easily upgraded. That allows for 500+ Gigs storage (though you need an external casing to get above 500 gigs right now). For use as a pure media server, large amounts of storage are a definite plus. However, not giving a point addition for this as it is something that is hard to measure.
So all in all in this category:
Xbox: +1 in the "game console and media server at the same time" category
PS3: +1 in the "can be configured as a pure media server" category
Media Playback:
This category is rather broad. One of the reasons people buy media servers is to limit the number of players in their racks. This has both advantages and drawbacks. Very rarely is a media center player equal in quality to a stand alone player. That means this category is mostly meant for media stored on the media center itself. However, we do need to count it. As such, the maximum IMHO a console can get in any subcategory here is a +.5
DVD playback:
The XBox is not a very good DVD player. It fails many of the tests from professional suites like the HQV suites. It does however play DVDs. It also does limited (although quite poorly done) upscaling. Keep in mind that this is NOT in reference to the HD HQV tests where there was a problem with the interlace tests that made many top of the line players fail. This is soley in regards to DVD playback.
The PS3 on the other hand is a decent if not "good" DVD player. In my opinion, it does not upscale as well as say the XA2, but it does a decent job. It is probably in line with the oppo and some of the older Denon receivers. The main problem I have with it right now is some odd color balance issues when upscaling. IE - It changes the settings I would need to use on my television to get proper hue and saturation levels set. However, +.5 for the PS3 here.
HD Media playback:
There are really two seperate categories people look at when looking at HD playback. Audio and Video. I'm condensing them here.
The XBox 360 with an HD DVD addon gives "par" performance for video playback. In other words, the picture comes out as you'd expect. It is similar to other players, even top of the line players. It is however more limited in the audio department. Here once again we run into the different model problems. Optical outs do not have the bandwidth to support lossless formats. I do not have an HDMI version of the XBox to see if it will output lossless formats. However, given that HD DVD is no longer a competing format and the limitations most 360s have in regards to audio, I do not think I would recommend it as a player. Especially when you can buy firesale HD DVD players like the XA2 for less than the cost of the 360 addon that are far far better players.
The PS3 is a solid Blu Ray player. It does not have EVERY feature possible (mainly missing bitstreaming audio, an IR remote, and analog outs), but its feature set make it arguably the best player on the market right now. There is really nothing more to say here. The PS3 would have a place in most home theaters as a Blu Ray player even if it had no other media options. +.5 for the PS3.
Media Streaming:
This means streaming media from one device (say a PC) to your home theater. There are reasons for doing this, even on a standalone HTPC. Unfortunately, this category is very need specific. I will try and be broad here.
Both boxes stream video. There is one notable difference:
The Xbox will extend Microsoft's "Windows Media Center". This gives it an automatic +.25 as most HTPCs probably end up running Windows Media center anyway. It also allows some other actions if you already own a PC with windows media center. Note that this is only half full score. That is because the PS3 can do most if not all of what the XBox can do - it just isn't as easy.
The PS3 can be set up to stream most types of files. I've even had success with .mkv files using the proper transcoder.
Digital Recording (ie - home made tivo):
Neither currently has viable solutions in my opinion (at least in the US). Play TV has a possibility, but it is not out right now. No points awarded for future promises.
VOD:
The Xbox currently has access to a pay as you watch VOD service with decent selection. +.5
The Playstation promises to have a service this summer. No points awarded for future promises.
Music:
I am not awarding points here. However, it is worth noting that the 60 gig model of the PS3 does support SACD. This is a good place to interject a disclaimer:
I have tried to be model unspecific. Before you argue that "XXX model of YYY can do this though!" keep in mind that if we take the best model of PS3 against the best model of XBox, the PS3 will have several media features that the XBox doesn't. However, not everyone has those features so it is pointless to use them as a basis for scoring.
End result:
Xbox: +.75
PS3: +1
Other Uses:
Don't think this is a cop out category. Rather, these are things that are selling points for HTPCs that do not have easy replication in the AV world. However, I would bet most people would consider these "peripheral" uses so will give at most .2 for a top score.
Internet Browsing:
Yes, there are reasons to do this on your television. Yes, it is a plus even if you own a computer. The XBox does not have its own browser. The PS3s browser is not perfect, but it is at least there. +.1 for the imperfect browser on the PS3.
Added Devices:
By this I mean mouse, keyboard, headset, remote, ext. Both devices have a slew of addon devices that you can use. However, the PS3 supports Blu Tooth with in my opinion is superior for this type of device. With both USB and Blu Tooth support, you can use your favorite keyboard or mouse with the PS3. I give it another +.1. Not a full score, but it is a slight step up. The reason it doesn't get a full .2 is because of lack of native IR support. An adapter is needed to integrate with high end remotes.
Operating Sound
All the XBox's I've heard sound something like a jet airliner taking off when the DVD spins up. That may just be a bad experience though, so I wont give points to the PS3 for being quieter. I did think it worth mentioning.
Gaming:
The only way you could award a winner in this category is with "fanboy" arguments. Both consoles have a good variety of decent games available.
End result:
+.2 PS3
Summary
So in summary, I would give the PS3 a 2.2 compared to a 1.75 for the XBox in advantages. Still, if you read through my reasoning you will see several reasons that they both make poor media centers. I would say the PS3 has the potential to be upgraded into at least a viable media center. I still wouldn't recommend it over a solid HTPC though.