[themoneycollector]

This is an endless debate and honestly you will be ok whichever you choose.

a. Xbox has IMO better online play and exclusives, but you pay a fee for that little bit extra so it evens out. Forza and Halo are only on Xbox.
b. PS3 is actually a stronger machine and at least gives you an extra bluray player around the house with most titles offering free online play. Gran turismo is only on PS3.

Ultimately, I would say pick whichever system your kids have more friends to play with. It's the online play that offers the most value and playing with friends is the fun part.