I have both XBOX and PS2.
If you dont mind mod chipping, then XBOX is the way to go.
XBMP (xbox media player) plays avis, mpgs, DIVX, XVID, Mp3, bin/cue VCDs and SVCDS form the HD, realplayer, shoutcast, heck, just about any format you can think of. Not to mention modded xboxs make great...