For me, while the xbox 360 is very close to the ps3 power wise, Sony's inclusion of the BR drive will be the winner. Even if HD-DVD wins, it will let developers use the ps3's power to its full extent. I just don't think DVD will be big enough for next gen titles.
Plus, the ps3 won't be getting superseded before 2012... Microsoft see consoles like white goods, they'll just peice one together quickly with off the shelf components when the 360 is getting slightly old.