Xbox Live has way more features, utility, stability, and quality. You get what you pay for.
The Xbox console itself is cheaper but more prone to failure (again, you get what you pay for). The game selection is primarily the same but the PS3 has marginally better graphical capabilities, if I remember right, and many more exclusives. Whether those exclusives are actually worth the difference in online quality and in price is really up to the user.
For me, being a Halo fan, Xbox was the obvious choice. For someone that prefers more variety in their platform and likes the adventure games a bit more (of which PS3 has many, many options), PS3 is the better choice.
Saying one is inherently better than the other is just kinda silly though.