Since I have owned both (and a wii to boot) I will share my story.
Long - so cliffs at bottom, along with pic of the setup.
Shortly before christmas the fiance and I bought a 1080p LCD TV. The PS2 just wasn't cutting it on the new screen, so we both decided to go for a new console. Knowing what I did about the console scene, I suggested a 360 as our first choice as the games she really wanted (Tiger woods, a couple FPS, etc) was on it.
Off to the store we go, ended up at Costco to do some shopping and found a nice bundle there with an extra controller. Had what we wanted so we grabbed it. Got it home, hooked it up, and realized my first oversight - no wireless.
The condo we bought isn't ethernet wired, so I had to think fast. I ended up grabbing another WRT54G and turning it to a bridge - easy enough fix.
The real mess happened shortly thereafter. The first comment out of my fiance's mouth when I turned it on was 'is there something wrong with it? why does it sound like a vacuum?' I detest noisy components in my system too.
Noise aside, I turned up the volume to try and drown it out, and then ran into a bigger problem. What happened to the screen and why are there blinking red lights on the front? I had it on all of 10 minutes and it was toast.
Back to Costco, refund/exchange, and re-hooked it up. New unit was just as noisy, and even made more drive noise than the first.
After about 2 weeks of trying to 'get over' the noise neither I or my SO could. Even with my Pioneer Elite 81TXV up to scary levels, that damned fan/drive noise was never quite attenuated. It bothered us so much, that upon running into a PS3 on the next shopping trip we decided to try it out, knowing that we had a good return policy on both consoles. Good games aside, I coudn't deal with the noise.
The first thing I noticed about the PS3 after hooking it up was wondering how to turn it on. Pressing the blue 'power button' didn't do anything... until I realized it was already on... It was dead quiet. Thinking it was too good to be true, I popped in my SACD of Dark side of the moon and noticed a bit of drive seek noise. Then it stopped, and was quiet again. Definately a night and day difference to the 360.
In the end we stuck with the PS3 and returned the 360. While I was sad to see some decent games go like GoW, I was extremely happy to be in silence again. We have TW 07, Resistance, Tennis and Motorstorm, so gaming is still good.
The best aspect of the PS3 has been its versatillity while remaning nice and quiet. I have over 350GB of my DVD's and HD videos on a 500GB Mybook hooked up, and we are constantly adding to the blu-ray collection. Lossless PCM 7.1 audio is stunning... it needs to be heard to be believed. I actually get dissapointed when watching a DVD and have to settle for DD/DTS
In the end we are both happier with the PS3, and more good games are coming. I am far from a fan of Sony, so bias was not an issue. Picked up a wii in February - good times waiting in the cold.
Sorry for the lengthy story... I'm bored.
If you don't have a problem with a noisy system and want pure gaming then go for the 360. I know it is a nitpicky sort of thing... but to me it made all the difference. Also, I understand that no merchandise can be 'lemon free', but it appears the 360 is a little heavy on the failure rate.
Cliffs:
Bought 360 - noisy and died in 10 minutes
replaced 360, even noisier
Bought PS3, very quiet and versatile
returned 360. Great idea, bad implementation.
Love the PS3, have since added a Wii to the family
Setup:
Look here