I don't know why there needs to be a "vs." between the two consoles...as someone once said in regards to comparing the Wii and PS3, it's like comparing apples and oranges. They both are videogame consoles, but at the same time, they are both "very" different (obviously). This console war is a different ball-game, for sure.
Nintendo's main focus (new m.o.) is on the ability to play videogames in a totally new way. To do this, Nintendo had to make some sacrifices, such as the lack of High Definition support, HDD, DVD-movie support, and having hardware that lacks the power/graphics capabilities of the other next-gen systems. And, as Nintendo have said, they are going after a different market, than Microsoft and Sony. This time, I think the Wii is in it's own market, really. Sure, it will "compete" to sell games and systems, but not in "power/graphics" and it doesn't really need to (Xbox360 and PS3 will compete with each other, mostly).
With Nintendo's games, it's not really how pretty they look (even though, they have mostly looked damn good anyways), but how they play and already, it seems that tradition is going strong, with Super Mario Galaxy, Metroid Prime 3: Corruption, The Legend of Zelda: Twilight Princess, Wii Sports, Super Smash Bros. Brawl, etc. Yes, Nintendo is still sticking to it's old franchises (while, creating some new properties for the Wii), but if the games are still high-quality and fun to play, as we expect, then we will continue to buy them.
And there's Red Steel, from Ubi Soft, which seems to be shaping up better and better, everytime it's previewed to the public.
One thing of concern, is that the Wii still isn't (from what we can tell) getting as much third-party support, as the other next-gen consoles. Third-party support has improved, since the GCN/N64 days, however and it appears more and more developers are really interested in the possibilities of the controller and what kind of unique games, can be created to take advantage of it.
Then there's the Wii Channels, which I think is a brilliant set-up, including the Wi-Fi connection and of course, the big one...the Virtual Console. Playing NES, SNES, N64, Sega Genesis, T-16 and MSX games on the Wii is going to be awesome! Not to forget that it's backwards compat with all GCN titles (another plus).
And of course, the biggest selling point: the Wii-mote/Nunchuck controller. Without question, many people are going to buy the Wii to experience this "different" way of playing videogames (while, still having the option to play games, traditionally, with the "Classic Controller").
People will argue that it's a gimmick (um, look at the PS3 controller "motion-sensitivity" funtion...that's not a gimmick?), or player arms will get tired (which, could happen), but the truth is that the Wii will sell. It will probably sell BIG. Maybe more than Xbox360 and PS3, maybe not.
Point is, because of it's uniqueness and of Nintendo's reputation of making fun, quality games, gamers will buy the system. It's possible it might out-sell (at least the PS3), because of the Wii-mote experience, the Nintendo excluisve first-party titles and cheaper price tag. People will probably buy it and place it next to their Xbox360/ or PS3, because it's a different kind of gaming system.
At least Nintendo is trying something new, innovative and different (as they did with the DS, which is kicking-ass in the portable console market) and want to release a system that's not in the $400-$600 range. Will this risk pay off, or fail? We will wait and see, but I will say that I plan on buying the Wii system at launch (always have bought Nintendo consoles at launch) and will put it next to my Xbox360.
The PS3 is going to be a powerful system. No question about it. Maybe more powerful than the Xbox360, maybe not. I think the games look impressive, but in my opinion, they don't look (that) more impressive than the Xbox360 games.
I see the whole thing as "Xbox360 vs. PS3" as the main event and then the Wii will get it's own (unique) spotlight to the side.That is unless, Nintendo (unexpected;y?) out-sells the Xbox360 and PS3 and Microsoft and Sony, suddenly start to think of ways to fight Nintendo for the top spot. Who knows, it could happen.
Sony has already made mistakes with the steep console price ($500 to $600), Blue-Ray, "updated" PS2 dual-shock controller (with "motion-sensitivity" and it's a good thing they didn't stick with the boomerang design) and most of the games don't interest me (except of course, MGS4, Heavenly Sword, Resistance and Devil May Cry 4), but that's about it. FFXIII and other Square Enix games will be a plus too, I guess, but I'm just not that excited for the PS3 games. Heck, Sony doesn't have GTA IV, but might get Resident Evil 5 as an exclusive (which, is another plus).
However, the PS3 is going to get as many third-party titles as the Xbox360, so, obviously, the Xbox360 and PS3 will be going against each other in that area.
The Xbox360 and PS3 are also going to fight over which one has the better hardware/graphics and online service.
Interestingly, Microsoft released their console first and (besides Japan) so far, it has not become "another Dreamcast" (which, I also have and think it's still a great console).
The Xbox360 has a nice, early lead and from what I can tell (with Gears of War, Halo3, and other big Xbox360 titles coming out soon), the Xbox360 is going to be a major pain to Sony's side this X-mas and beyond. It will be very difficult to top the kick-ass Xbox Live service.
The PS3 is going to deliver, in terms of power and there will be some "must have" games, but I think, this time, Sony will NOT be #1. The Xbox360 has a very strong user base and A LOT of attention is on Nintendo and the Wii right now, so we will see.
I'll probably buy a PS3, but certainly not this year. I already spent $400+ on the Xbox360 (and will continue to buy 360 games through the year) and I will buy a Wii at launch (keeping that "buy a Nintendo console at launch" tradition alive).