I read through some of the XBox 360 announcements last week, and the one bit that really caught my attention was that all XBox 360 owners will get free weekend access to XBox Live. That's a killer feature. Microsoft's online strategy has dominated Sony's (even if Sony has sold more hardware) and Sony will have to announce some very serious, well thought-out plans if they want to compete in the online space with the PS3. I'm generally not a Microsoft fan, nor do I own an XBox, but I certainly plan on picking up one of these new units when they're released.
The Xbox Live online experience is stellar. There are a few reasons for this, but one of the main one's is that Microsoft "owns the login." All games must authenticate users through the same system, which leads to a consistent user-experience. Members have one bill, one login, and one system to deal with. It also means that Microsoft can build value-add services like social networking -- something they are really pushing with the 360.
In contrast, the Playstation strategy requires game developers to manage their own online offering. Everything from the connection, to account management, to authentication, to billing, to game play must be built by each developer. This empowers a developer to build exactly the experience they want; But unless a shop can guarantee the needed volume of subscriptions to cover these costs, it just isn't feasible to do. Because of this, smaller titles don't get online features on the PS2. (Heck, most games don't get online features on the PS2.)
The 360 is also being positioned as an always-online media center. It let's owners chat online (voice and video) watch game and movie trailers, listen to music stored on your PC, etc. It's a digital hub, to use a marketing term, that brings the internet and the media on your PC to your television. Building on that, it doesn't take much of an imagination stretch to see online music and movie sales coming through the 360 either (although sadly, probably not via iTMS.)
There's always a negative side though, and in this case I'm guessing that the media center functionality is designed to work only with Windows PC's, locking out other OS's and devices. It would make sense coming from Microsoft, but would be a poor choice if they really seek to "own" the home network experience. Furthermore, Microsoft's history of poor security makes the thought of leaving the 360 powered-on and connected all the time a bit scary (and wasteful.)
I suppose we'll have to wait until the holiday season to find out how well all of these ideas actually work. There have been a lot of services trying to bring the net to your television, but most of them have sucked. In the past, and likely still true for most consumers, the television did not offer the screen clarity needed to realistically read text. The technology was designed for moving pictures, and works very well for that. If you've ever tried designing TV-based software interfaces, you know exactly what I'm talking about. Characters bleed and twitch, and the resolution is terrible. But for video chat, movie trailers, and game previews, the television is perfect -- and that's where the 360 has an edge. Done right, the content will be interesting, and services designed specifically to run on this infrastructure have the potential to be huge.