So which should you go for? I'll leave the basic Xbox vs PS3 quandary to you, but as for packages, at £299 the 40GB PS3 is good value - it'll be rare for you ever to need more than two USB ports. Keep an eye out for retailer bundle deals - most will offer a game or at least a Blu-ray movie or two and for a few extra quid you could get an extra controller as well. With Xbox 360, the Arcade machine's lack of a hard drive is a big minus for those hoping to use Xbox Live Arcade by downloading more games, plus GTA fans will find themselves having to fork out more than £100 for a hard drive when GTA IV comes along.
If you're really confused, there's always the Wii. If you can find one: the machine that doesn't offer a dozen iterations is the one that's selling like hot cakes. I wonder if there's a connection?