I was in the same dilemma as you some time back. I am copy pasting a post I had made in another forum regarding the reasons I choose PS3 instead of XBOX 360.
XBOX 360 has more games, cheaper games and unreliable hardware.
PS3 has lesser number of games, costlier games, reliable hardware and more customizable and functional.
I almost got myself a XBOX 360 Halo 3 Special Edition console, but changed to the PS3 at the last moment.
Some reasons for the same.
1. Almost similar price range XBOX 360 Halo 3 Special Edition with 20GB HDD 27k, PS3 60GB Edition - 30k. Also there is good likely-hood of decent price decrease on XBOX 360 by the end of the year.
2. The lot of Halo 3 Special Edition XBOX360's in India are still not Falcon based. Old stock. RRoD cases with the new versions of XBOX's too. So its still not reliable. Warranty and servicing is not fast in India, especially if you not in one of the metros.
3. Games are Region Coded for XBOX 360, but you still have to get the PAL version for warranty. The number of XBOX 360 games released in India is very less. PS3 games are not region coded, so I have more availability of games compared to XBOX 360.
4. PS3 more Customizable and functional compared to XBOX 360
5. There is more probability of my Company gifting us an XBOX 360 than a PS3.
6. XBOX 360 has been on the shelves for a long time now. So theres probability that MS releases a announces a new console one of these days.
I do not have any bias towards any one of these consoles, but I got the PS3 with my money with the hope that I can either get a XBOX 360 as a gift or buy it myself later when the company pays bonus.
In the end, I would suggest that if you want to play lots of games now, go for the XBOX 360, if you want to play lots of games in the future for PS3.
Also modding is simply not worth it on either of the consoles. on XBOX 360 the low reliability of the hardware makes it necessary to have local warranty. Also MS is banning modded XBOX 360's on live. On PS3, the cost of Blue-Ray media makes it impractical to pirate (at least for the time being).
Also getting a modded XBOX 360 from US is a huge gamble. There will be no warranty here and XBOX 360 hardware even after the new 65mn CPU upgrade is still quite unreliable hardware. MS has recently extended the warranty for RRoD problems to 3 years and everything else is covered for 1 year. If you buy in India, you can at least claim warranty in case of RRoD. If you get it from outside you will not be able to do anything.
Comparatively PS3 is very reliable, I had run my PS3 for hours at a stretch with out issues. Also you can buy a PS3 form US without issues. PS3 titles are not region coded like XBOX 360, so you can buy titles from anywhere. the only thing is that there are not many titles at the moment. The good titles/exclusives you can count on your fingers. Also titles are costlier averaging at 2.5k per title.
As for as the future of these consoles is concerned, as per the developers, about 70% of the XBOX 360's full potential has been used till date while in the case of PS3, about 30% has been used. Going by the numbers PS3 has more potential for the future. But its not as simple as that.
PS3 is a lot difficult to program than XBOX 360 and getting that untapped potential is not an easy thing to do. Most of the multi-platform developers trying to make a quick buck are shunning the PS3 because of the difficulty in porting, but exclusive developers are considering the PS3's power a boon and they are gradually optimizing their engines for it. PS3 would probably lose many multi-platform games, but I am predicting that there would be some brilliant exclusives (may be not that many in number) for this platform in the future.
XBOX 360 on the other hand is slowly reaching its max potential. But there is still scope for some brilliant games on this platform. I guess MS would be about ready to release its next console in another 1~1.5 years depending on the saturation of the XBOX 360's in the market.
Overall both consoles have their advantages and disadvantages, either of them can be worth buying depending on your needs, so you decide on your own. As for getting a modded console, I strongly suggest againist it unless you have loads of money to not to bother about a bricked console without warranty. Maybe it would be ok on PS3 (when it gets modded that is) in the future, but not on the XBOX 360.