I have both consoles, but play PC mostly. The PS3 has better hardware, but the 360 has better software, and out of the two, I surprisingly prefer the 360.
The PS3 regularly drops it's WiFi connection, shows errors when streaming video from my PC, and I don't like the PS3 controller. I doubt I will use it until GT5 comes out, but at least the G25 works with it.
I bought the 360 Elite a few months ago, and the experience wasn't brilliant. After buying the high-end console, I then had the buy another $50 adapter to get sound working, had to spend $80 for 12 months of XBOX Live Gold (which I haven't activated yet). I recently took up their offer for the one month of Gold + 1 month free, only to find that once you sign up, they set you up for automatic renewel, and have recently removed the option to cancel this from their website, so that you are forced to call them up on the phone.
Anyway, once you are setup, the 360 is more fun. It's just a shame the G25 doesn't work with it. I don't mind too much, since I only use the 360 as a Windows Media Extender, to watch movies and recorded TV from my PC.
I don't think you can install any old HDD in the 360 - it has to be a special MS one (which costs twice as much as it should), so you might as well get the new slim 360 if you've got the money to spend.