Originally posted by: SunnyD
Console graphics will always get better just as PC graphics get better - they draw on the same technologies. You have to remember that when a console is designed, it's locked into that particular graphics implementation until the next console cycle. Generally - as is the case of the XBox 360 - the GPU's in a console are somewhat more advanced than the at-the-time current generation PC counterpart, and usually become the basis for the next generation PC parts. But then 3, 5, 6, however many years down the road, GPU in the console becomes dated compared to PC parts... so the next iteration of console comes up and features an updated GPU based on current PC specifications along with enhancements that move it beyond the PC part, and the cycle perpetuates.
The key is that a console is a closed system - once it's spec'd out, the developers know what to expect, and can then code around any possible feature set the console has, while coding around possible shortcomings. With the PC world, there's always room for advancement because the PC's GPU is expected to do so much more (CAD, precision graphics, GPGPU, etc) that isn't generally in the realm of a console.
To answer your question directly (which one is better) - that's all subjective preference. Performance-wise - titles are generally written toward the entire platform for a given performance metric, and the quality of the graphics are just about the same. The real key is - which platform has the titles you will enjoy more (as both have exclusives), and which console has the peripheral feature set that would give you the most value (in the case of titles that overlap)? Personally, the PS3 has more titles that look rockin' that I don't see on the XBox, though the XBox has certain titles I would love to have that the PS3 doesn't. So what do I have? I have a Wii...