you have no idea what your talking about. Microsoft didn't include HD-DVD to keep the prices down, and seeing as how they sell more 360's then PS3's any given day, I think it has worked out well for them pretty far.
It is no doubt that Microsoft had a blunder with HD-DVD, however, it isn't their fault, they should have had much better advertising and should have been very aggressive trying to get the movie companies over to their side. Don't forget that it wasn't totally Microsoft.
The PS3 obviously has more power, because of it's better internals, and the Blu-Ray is now definitely a huge plus, but the 360 has much better integration, and not to mention exclusives. GoW, Mass Effect, Halo 3 (which is not overrated...it's a great game). I'm pretty impartial, I own a 360, but have owned every companies product in the past (N64, Gamecube, Gameboy Advanced/Color, PS2, and now the 360).
It is just a better overall unit that covers all the spectrums of entertainment.
The real unit that is amazing though is the Wii. I'd wish Nintendo would have given it more power though- I've read places where companies won't make games for them because the graphics are so bad it is a waste of time.