The problem with the Playstation 3 is a dearth of good exclusive games; when the games industry decided to do cross-platform development of all the major titles, it also made the choice of game console largely irrelevant, as the experience of playing a Xbox version of the game is not substantially different than playing the same game on a Nintendo Wii.
When the Playstation 3 was released in November of 2006, I noted that the price put it out of range of all but the most hardcore of gamers, and that the launch titles failed to have a strong killer app; nearly 3 years later, the PS3 still lacks the killer app, although the game library of the PS3 has grown, it still does not match the catalogs of the Nintendo Wii and the Xbox 360. Activision's Bobby Kotick has warned Sony that without a price cut on the system that they may be pulling support for the Sony consoles:
"...the PlayStation 3 is losing a bit of momentum and they don't make it easy for me to support the platform. It's expensive to develop for the console, and the Wii and the Xbox are just selling better. Games generate a better return on invested capital on the Xbox than on the PlayStation".
The strength of the PS3 these days seems firmly entrenched in its ability to be more than just a game console; it is an all-in-one media entertainment center; it plays DVDs, Blu-ray discs, and even has the ability to access photos, videos, and music over the network. The Playstation 3, is in fact a somewhat impressive machine; while game consoles have always been a sort of single purpose computer, this current generation of consoles improves on that idea, and they essentially become the computers of the living room.
Of course, the biggest improvement is in the hi-def nature of the PS3 -- the Blu-ray player is probably where the bulk of the value of the PS3 lies, as Blu-ray players still average around $300. Those who are planning on purchasing a Blu-ray player for their HDTV would probably do better by purchasing a PS3, and the PlayStation 3 Blu-ray Remote Control (~$20).
While the current PS3 consoles on the market do not retain PS2 compatibility,the PS3 does allow for play of PS One games, and there are plenty of downloadable casual games available for the PS3 (sadly, no RPGs, although the handheld market has them in spades). My first purchase was Noby Noby Boy, a game from the creator of the bizarre cult classic Katamari Damacy. The process was relatively painless; though the Playstation Network Store works on the idea of wallet system; you first put money in the wallet either via credit card, or through buying Playstation Network Card for a set amount of money; these are in increments of full dollars, while the games on the PSN end in .99, leaving $0.01 for Sony to collect interest on.
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