My kids bought their PS3 but I ponied up a portion of the price because I was looking at buying standalone Blu-Ray player. However, other than the 5 free Blu-Rays I got for buying the PS3, I have watched one other Blu-Ray, Iron Man. We play lots of DVD's in the PS3, though. I am getting direct HDMI to my Samsung HD Plasma and optical digital out to the 5.1 amp. There is a slight, but detectable, improvement in video quality and sound over the S-Video and analog audio connections (but not the optical digital audio output) from my Toshiba DVD player.
Quite simply, for the price, Blu-Ray is not worth it for all but the most intricate movies, mostly SF and action movies. Who's going to pay the upcharge to watch I Hope They Serve Beer in Hell on Blu-Ray?
One of the best features of the PS3 is its ability to link to a media server and stream video (codecs MPG -MPEG-1 (MPEG Audio Layer 2) (.MPG), -MPEG-2 PS (MPEG2 Audio Layer 2, AAC LC, AC3(Dolby Digital), LPCM) (.MPG), -MPEG-2 TS (MPEG2 Audio Layer 2) (.MPG), -MPEG-4 Part3 (MPEG-4 AAC Low Complexity (unprotected)) (.MP4), -MPEG-4 Part2 (MPEG-4 SP; MPEG-4 ASP) (.MP4), -MPEG-4 DivX (in AVI) (.AVI), -MPEG-4 H.264 (.MP4 / .M4V), -MPEG-4 AVC (.MP4), DivX (.AVI / MPG), XviD (.AVI / .MPG), AVI (.AVI), Motion JPEG, -Motion JPEG (Linear PCM) , -Motion JPEG (Î¼-Law), VC-1 (.WMV), AVCHD ï¼ˆ.m2ts / .mts )).
You can even burn .AVI to a CD and play in the drive. In addition, it becomes a massive jukebox for your ripped CD collection. The PS3 has obsoleted my 200 CD Nakamichi player.