LOL @ Generation Ahead
Sorry, but the PS3 isn't a generation ahead of the 360. It just took a different tack, going for lots of smaller cores rather than the 3 in the 360.
Unfortunatly Sony didn't do enough on the dev side to help the studios use those cores effectivly. Microsoft did what they do best, and harness the developers, with lots of docs, decent tools and old fashioned bribes.
The other big diff technically is the GPU, the 360's is slightly better, and more importantly (as it turns out) has a larger memory for the framebuffer.
If you read any of the EuroGamer head-to-heads, its this framebuffer size that tends to allow the 360 to have proper AA, and not the blur-o-vision smear of the PS3.
Both consoles have enough power to have decent games, and both companies are supporting them long term with addons and internal redesigns. I don't think we'll see new devices until after the next GPU generation (ie the one after Nvidia's fermi and ATI's 5970 gen)