Pros: Great graphics, flexible multimedia capabilities, audio down-sampling, exclusives, blu-ray playback
Cons: Power-hungry, difficult to develop for, no remote
The Playstation 3 is, in my opinion, the best console of the last generation. I use mine primarily for streaming video and gaming, and it's generally very easy to use. Video quality is very good, and the ability for it to downsample audio for older receivers is a huge plus in my book. Until recently, I was using an older receiver and this allowed me to experience the increased audio quality of Blu-Ray even though my receiver couldn't decode the uncompressed audio.
The PS3 is definitely the most powerful system of the last generation, eclipsing the Wii (what DOESN'T eclipse the Wii in terms of power) and handily beating out the XBox 360. Unfortunately, the cell processor in the PS3 was difficult to develop for and the XDRAM Sony used, while fast, was expensive and never caught on the way Sony hoped it would. However, now that it is this late in the game, the cell processor is finally able to be fully utilized and it shows in exclusives like Uncharted 3 and The Last of Us, which have graphics more stunning than anything I've seen on the 360. Standard outputs make the PS3 easy to use, as well as a normal 2.5" SATA drive. If I ever decide I want more space, it's extremely easy and pretty cheap to increase the space available by simply popping in a new drive.
This is one service that I highly recommend. While you can play online for free, PS+ is a no-brainer with online save storage and all the free games. You don't get crappy free games, either. Right now, Payday 2, BioShock Infinite, and Borderlands 2 are all available for free for PS+ users. I've gotten XCOM and Saints Row 3 as well, and plenty of other excellent games. This alone makes PS+ worth it at $50/year. It will easily pay for itself in terms of freebies. Sony may have angered some by requiring it for online play on the PS4, but I don't mind at all. If you don't have PS+, you either truly can't afford it, don't have internet, or just don't care about free games and offsite backup of your saved games. Bonus feature: installing patches overnight so you don't have to wait for those.
Luckily, by the time I got my PS3, most of the kinks had been worked out of the UI. There are a lot of options, which others have mentioned could be confusing for some, but my wife is able to pull up Netflix and Blu-Ray/DVDs without issue. The batteries in the controllers last FOREVER. Seriously, three years later and I'm still impressed with how long the batteries in the controllers last. The fact that they charge with MiniUSB and are fairly easy to pair with a computer for other uses is icing on the top. Games take a bit of time to load, but that has as much to do with the 54000 rpm drive as anything. I'd like to see what happens if you put a SSD in the system, but I don't have one to donate to the cause.
How I use it:
This is pretty much the center of my home theater system. I use it for Netflix, Amazon Video, YouTube, physical movies, and games. Essentially, it is an exceptional multimedia system.