Well, consoles are not a bad idea for people whos lifes don't revolve about constant gaming...
Gaming today requires you to put alot of money into your system...
Consoles are a great solution, because it usually takes a year or 5 before you can buy an upgraded console. Not to mention most games will still be available on older consoles... Another thing is that you will never have to upgrade your console, the games are always customized to work on it.
For real gamers this is a huge disadvantage, doom3 for instance, running with dx 8.1 and OpenGL 1.1 with 512x384 (guessing) textures is just a disaster.
Anyway, PC's have always been the leading platform for the gaming industry, and in my opinion the most flexible and reliable platform (if you update your hardware enough)...
Buying a PC might cost a little more when you start, but from there, you just need to upgrade periodically. For example, I sold my last Geforce 4 for €150, and bought the Radeon for €250, that way those new videocards aren't that expensive at all. Just make sure you never buy the latest card, usually the previous serie will work fine (take a look at 9800XT and X800). Aside from that computer games are far more easily to obtain, and the prices drop more faster then Xbox and PS2 games.
Not to mention that almost every household contains a PC, so buying a console is just as expensive as upgrading. Internet nowadays is a must, and I bet that almost every console player has a computer in its home...
In my opinion, Microsoft made the ultimate console, since some parts (like the HD) can be upgraded even now. The OS can completely be erased, and Windows or Linux run on it without any problem... The Xbox2 will probably be more like a PC (in terms of upgrading etc) then a console... And I bet they'll make more parts (like the GPU) upgradable...
.. just my two cents...