XBox rushed the initial builds to market, but made up for it with a 1.1 billion dollar write off by giving anyone whose XBox malfunctions a free repair and a three year warranty. The new ones don't have the problem.
PS3 online is free because it sucks. The XBox destroyed the PS3 in this generation of the console wars, and the numbers prove it. There are very few exclusive PS3 titles that are considered "console sellers", whereas the the Xbox has franchises like Halo and Gears of War. It also has a much higher attach rate.
The Xbox has a much superior online experience, and will continue to do so in the future (for example, Netflix HD streaming will be awesome once the library is increased). Sony took a bath on the PS3, because they thought everyone would shell out $600 for a blu ray player.
I loved my PS2, and even borrowed a PS3 to finish the Metal Gear saga, but would never consider buying one. Sony just blew it this time.