Well, mine works fine. I've played for over 30 hours since I've gotten it. No overheating issues at all, games run fantastically with no framerate issues.
It's pretty much the best console I've ever owned. If you don't buy it for the power of the system or the graphical prowess, the online services are amazing. Downloading demos of games right to your harddrive, plus trailers and full classic arcade games is awesome.
The dashboard is all it's cracked up to be. You can put pictures from your digital camera on there as your background, you can play music with a full interactive visualizer, all in beautiful high definition.
If you don't have online then I would say any of the three systems are good, they'll all be about the same power-wise(but the nintendo will be worth owning no matter what just for the original ideas!) but if you want to play online than 360 is the way to go. PS3 won't have a unified online service, meaning you'll probably get the same number of online games you have on your PS2.