xbox.

1- True hardware potential hasn't been reached yet. We have a PS2 and a 'box in the apartment, and the xbox wins on every cross-platform game hands down.
2- Easily upgradeable to a linux system, as mentioned before. If you're comfortable modding it, its much easier to swap in the mod chip for burned games and DVD's. I have an 80 GB hard drive about to go into my xbox as well.
3- Not pre-loaded for DVD play, but plugs right into any network for x-live or direct 2-box play. I've personally had a 16-player halo game going at the frat house, and all the extra material required were ethernet cords and people to play.
4- DVD kit is cheap, and you get a remote too... i dont see it as a big deal...

You only suffer in the decent-game selection department... but I'm sure it'll get better in time. My ps2-owning roommate already plays my xbox much more often, but... i do wish i had the .hack series..