Hardware: The Xbox 360 has some fairly impressive hardware. The Processor is a tri-core power PC developed by IBM. The tripple core gives it a good boost for handeling multiple objects on your screen at one time. The Memory is well handled to keep the system from bottle necking. and the GPU(Graphics Processor) is still considered one of the best on the market. The Xbox360 also Utalizes a DVD player for playing games and watching movies. It does upconvert DVD movies to a higher resolution which is a benafit for those with a big screen T.V. And finally You possibly have a hard drive depending on when you bought the system and what SKU you have. The Xbox360 has had some Hardware Issues Thought. This is also known as the Red ring of Death. Most of them have been cleaned up or fixed in it's 2 year exsistance but it has hurt the console in consumer confidence. It also has the now failed HD-DVD add on drive. Not that it was a bad product. But many have expressed the desire for it to have been integrated into the Console it's self instead of being an externial perifial.
Games: Currently the Xbox360 has the most games out. The Xbox brand is known mostly for it's FPS(First Person Shooter) games. Although they do have many other good games. Like Dead or alive, Saints row. and Project Gothem Raceing. But the biggest hit titles for the Xbox have been it's FPS. 
Most notably The Halo Franchise. Halo is one of the Best Selling franchises of all time alongside those other famous characters like Sonic, Pacman, Mario, and other big game Icons.
The Xbox Brand is also very well know for it's online system. Xbox live is one of if not the most popular online community out there. There is a small fee, But if you are an online gamer it is worth the money.
Networking: The Xbox 360 does have a ethernet port on the system but if you have a wirless network you will have to pay a premium for the seperate wireless adapter. So I would have to recommend that if you can, you will want to hardwire the Xbox 360 to your network. but another good thing about the Xbox 360 is it's ability to become a media extender on your network. Meaning that you can listen and watch all the Music & movies on you windows based PC. This is actually one of the big selling points for the Xbox besides the games.
Conclusion: The Xbox 360 has some great things to it and some not so great things depending on how you look at it. The lack of a hard drive as standared is in my opinion an downgrade for the originale Xbox. The HD-DVD not being intigrated and not used for games is also a possible downgrade to the system and potentially hurts future game development. Although that is not a definate and still has yet to be seen if it will be a hinderance or not. Most of the Xbox 360's originalle issues was Microsoft trying to beat Both Sony and Nintendo to market. Some of the features feel rushed and un-polished. But this does not take away from this being a great console. So depending on what types of games you like to play and what game franchises you like to follow the Xbox 360 is a good choise in the end.
This comes off the news That I personally read this morning that Toshiba is now stoping thier production of HD-DVD players. For those who don't know why that is so important. That is because Toshiba was the company that Brought the HD-DVD product to the market. They have had some very good backers, but thier competition has been like that of the picture below. Blu-ray brought to much to the table. Sony haveing thier own Movie studios these days unlike when it was the VHS vs Beta Max days. And Also With the introduction of the PS3 having a blu-ray player built in they were able to saturate the market quickly. But really the biggest blow was when Warner Brothers. One of the largest movie companys out there pledged thier support for blu-ray. When previously they were the only Major movie studio still supporting both formats. 
Now I will admit I made my choise early. But that is because I am a Sony Playstation fan. So I would have bought the PS3 anyway and I only stood to benefit from having Blu-ray become the High Def media of choise. But I still stand by my choise for many reasons but the most notable one would be capasity of the Blu-ray disk. I am now going to be looking forward to seeing many movies previously only on HD-DVD now moving over to Blu-ray. Like Warner Brothers said and Toshiba with thier most recent announcement. We can Finnaly get rid of the confusion in the high def format wars and push the high def format to being a worthy predasesor to DVD.