There are many highly technical people on this board that can give more detailed answers, but as a moderately-technical user, I absolutely love the PS3. I've had mine for about 3 years, and would summarize as follows:
- Excellent Blu Ray quality, features, with constant upgrades via wifi from Sony.
- Well organized x-bar interface, fairly easy to use.
- HDMI connectivity to receiver, TV, etc.
- Wired and wireless internet connectivity.
- Integrated with Netflix now, no CD required.
- Game portfolio is now outstanding, with many excellent shooter, adventure and other games available (check out sites like gamespot.com for the latest).
- LOVE the media server function, that is, the ability to stream photos or music from my laptop through the device to my stereo. I never even considered these features when I purchased it, so it's a wonderful bonus.
- Internet browser is still sub-par, even after upgrades. Why they don't work as well as Explorer or Firefox boggles my mind.
- Can't stream .MOV video files (e.g. QuickTime), as Sony apparently doesn't want to play nice with Apple. A minor issue for many, unless, like me, you have a video camera that uses MOV format.
- Bluetooth interface for remotes works fantastic for the remotes, but makes integrating with many all-in-one remotes like Harmony an issue. However, there are, I believe, a few companies putting out remotes that incorporate bluetooth, and there are workarounds.
- Newer PlayStations are not enabled for PS2 or earlier game formats, though there is rumour this might change.
- Fan can be loud when unit gets hot.
I have the 60gb with a hardware component that allows playing PS2 games. Other units do this with software, and others don't do it. Check the PlayStation website for backward compatibility if this is an issue for you.
In short, I love this machine, and the games available today are mind-boggling in their sophistication, graphic and sound quality and creativity.