UPDATE - The Xbox seems to have more compatibility with my movies than the PS3 does. The 360 will also do Xvid with a system update for MPEG4 and AAC. The one thing the PS3 does nicely is auto-size the screen. With the Xbox, I need to manually change the picture size with the TV presets.
The Xbox 360 also buffers video before it starts to play whereas the PS3 is more instantaneous. Mind you, I am not using the Media Extender, just a secondary source under the video section. If I stop a video with the 360, I can resume it right away whereas the PS3, the playback is much more sensitive.