Phantaxus is right, the three red light fault is covered by a three year warranty, but to give them their due, Microsoft have changed a number of components over the last 18 months and the reliability is considerably improved.
The PS3 has nothing special for me either, if I want a Blu-Ray player, and I do, I'll get a dedicated one for the same sort of price which will do the job better. There's nothing special on the gaming front either, GTA IV has been developed for the 360 this time and ported across to the PS3 and Gran Turismo is a duller version of Forza. Those two games were the only reason I bought a PS2 many moons ago