Well, it's by far the best system in MY book. Out of the box, it has support for 480p and 720p (hi def) output, and almost all Xbox games are coded for at least 480p; 4 controllers ports, and broadband. The graphics are worlds better than PS2, and anyone who says different is either playing their Xbox on a 20 year old TV with an RF adapter, or is a crack head. Xbox live kicks serious ass, Sony doesn't have anything remotely like it...all online play is handled through the individual publisher.
The new PS2 is pretty cool, it has broadband built in, and does progressive scan DVD...which the Xbox doesn't do. Also, you can use the PS2 dvd player w/o a special adapter, while the Xbox requires one.
Xbox does not have 5000 games like the PS2 does...but how many PS2 games are that good, and do you want to play them? PS2 has better platformers and RPGs, while Xbox does sports games and shooters better.
I have all 3 systems, and the Xbox logs most playing time by far. I do play the PS2, and I've picked up some great low budget titles...but if I could only have 1 system, it would be Xbox. Once you see Quantum Redshift in 480p on a 55 Widescreen TV, you'll know what I'm talking about. Hardly any PS2 games run in 480p, and you can REALLY tell the difference on a big screen tv. I know graphics alone don't make a game good, but there is a law of diminishing returns in that if the game looks too shitty, I just don't want to play it all that much.
Now, some one will come along directly and tell you Microsoft won't be in the video game market in a few years. Once again, there seems to be a lot of crack smoking going on. MS gets about $60 mil year from Xbox live, and just did a $100 mil DAY with the release of Halo 2. Don't believe for a nanosecond that MS isn't committed to the video game biz.