i've been pretty happy with my 360 - that's why i waited so long to choose between that and the ps3. it's cheaper, and i still don't know who will win the HDDVD/Blu Ray war...so i didn't want to drop $500 on a system that could possibly have obsolete hardware/tech. within a year (i keep thinking back to the vhs/beta war).
If you've read anything online lately, especially info coming from CES in Vegas last week....HD-DVD is on its last leg. Warner Bros announced on Jan 4th that beginning May 08, they will switch to Blu-Ray exclusively. That leaves only Paramount, Dreamworks and Universal as the studios supporting HD-DVD. Also, Universal's exclusive contract with HD-DVD just expired this month and was not renewed as of yet. I don't foresee this Hi-Def DVD war lasting much longer.
if blu ray wins, hopefully that will mean microsoft will get blu ray licensing to make an add-on external unit like their hd-dvd one (which i don't have).
overall for me, though, it's not about what movie format wins. i went with what i thought had the best games, and i've been very pleased so far. i had the original xbox for at least 5 years with no problems too, so brand loyalty did play a part in my decision.