They both have issues. The PS3 has a Yellow Ring of Death too. It goes like this, exclusives and what you look for. If the largest game library and also online play is important to you, then X360 is your platform. If you want a total entertaiment unit (plays blu-ray) with less games (but not enough to really cross it out) and an online service that will be charging soon and is not as robust as Xbox Live, then PS3 is your system.
I prefer the X360, but that is me.