I'm planning on a PS3 but I'm pretty sure my PS2 can easily tide me over until then. (It's my computer that truly needs a serious upgrade.)

I've always had some problem conceptualizing the competition between the xBox/360 and the PS2/PS3. On some level I know they're in direct competition but on another level I've differentiated the systems. That is, I have a PS2 and I see absolutely no reason to purchase an xBbox or xBox 360. I like the action games and RPGs of the PS2, both being genres that I don't see the xBox/360 significantly capitalizing on to entice me. In addition, the backwards compatability and my lack of interest in online console play mean the PS2 more than meets my "needs".

Although the potential price of the PS3 *is* a little scary.
 

I've been hitting the local Dave & Buster's Video Game Arcade with my son. We get to play the latest video games, but we also win credits that can be turned in for prizes or saved up to turn in for bigger prizes, like PS2s or XBoxes. We were over halfway to our goal when the XBox360 came out, and the redemption price tripled.

So I cashed in my credits on a radio control version of Michael Schumacher's 2003 F1 Ferrari (not quite a toy, the thing goes up to 40kph, according to the box) so we've been having fun with that recently.

On the console front, I'm leaning towards the PS3 because of the backwards compatability. I just need to wait for it to come out...and for my wife to give her approval ;)