Id say Xbox! I was toying with the idea but managed to get one from Microsoft as a freebie with a few games and instantly loved it. Im not a big gaming person but this actually swayed me.
As above, there are alot more games for the xbox and also the online community is so much better.
I also think that you can change the DVD reader to take blueray as the xbox - apparently - is not configured to just take HD DVD's but both, its the encoder that decides what format it shows. Im sure thats what the Microsoft bods said anyway.
All 360's have HDMI out now, as well as composite and HD (ish) composite. I wouldnt bother spending the extra on the elite, especially since you can buy a facia if you want it to be black