First and foremost, I do not see why everyone has been tricked into believing that the PS3 has more graphical potential than the 360. Everyone has been buying into the Cell hype far too much.
Architecturally, the PS3 GPU is a slightly modified Geforce 7800GTX at best. It has 256MB of video memory, leaving the rest of the system with 256MB for everything else.
The 360's gpu is a unified shader design, just like the Geforce 8800GTX. The Xenos has 48 unified shaders.
If any of you all recall, Anandtech had an article discussing the performance of the two next gen consoles in real world terms.(This article was slashdotted, but copies of it may be able to be found if one looked hard enough) They concluded that the PS3 GPU was similar in performance to the G70, while the Xenos would perform similarly to a 24 pipe R420. Now think about that for a minute. The G70 is a 24 pipe NV40 and little more. If a 16 pipe R420 beats a 16 pipe NV40, then wouldn't logic say that a 24 pipe R420 would beat a 24 pipe NV40?
The PS3 is a 3.2Ghz in-order processor capable of running two threads itself, while also having seven SPE processors. The Xbox 360 is three of those 3.2Ghz processors minus the SPE. Developers and Anand have both stated that the Cell processor is definitely not the processor for games. Most developers have stated that all of the SPEs will go without being used as they are too specific and linear to be of any real use. Developers have also stated that they dislike the in order processing of these processors, and that will limit the performance output severely. Processor wise, it is a complete tossup. If a developer could perfectly use the seven SPEs and the single processor of the PS3, and another developer could use all three of the 360 processors perfectly, the overall cpu power output would be in favor of the PS3. Keep in mind, however, that it is much easier to use the three cores of the 360 than it is to use the single core and the seven SPEs of the PS3.
People tend to say that the PS3 has a memory advantage over the 360. This is completely false. The PS3 has 256MB of system memory and 256MB of video memory. The 360 has 512MB of memory that can be used for anything. This means that developers can dedicate as much memory as they feel necessary to video and system. They are not forced to abide by the constraints of a set hardware setup; they make the memory of the system change to suit the needs of their software.
Now for video. The G70 has 24 pixel pipelines and 8 vertex processors. The Xenos(R500) has 48 unified shaders. Each of the unified shaders is not as capable as one of the pixel or vertex pipelines of the G70. Same story here as for the memory of the systems. The unified shader architecture is completely flexible and programmable in real time. Developers can have more or less pixel shaders and more or less vertex shaders to suit the various scenes of the software. The hardware changes to suit the software, not the other way around.
I am not saying that one console is better than the other. I am saying that it is far too early to just flat out and say the PS3 is superior to the 360 technologically, especially considering all of the hardware advantages the 360 has over the PS3. Some would argue about pricing as a way to say which console is faster using the "It's more expensive, so it must be better" mentality. Keep in mind, the primary reason for the $600 price tag of the PS3 is the blue ray drive, something that with out, the PS3 would probably cost the same as a 360.