The Xbox 360 can still only play DVDs and CDs -- Blu-ray movies won't work, as they will on a PS3, and the upcoming PS4 and Xbox One.
Both the PS3 and Xbox offer online multiplayer games, but Xbox Live is arguably a larger, more engaged community. The catch is that in order to play online, you need to upgrade to the Xbox Live Gold plan, which costs $60 per year (though you can often find deals for closer to $40).
Annoyingly, the Gold plan is also required to access any of the Xbox entertainment apps. That’s unfortunate, because Xbox arguably offers some of the best selection of nongaming apps out there, including Netflix, Hulu Plus, Amazon Instant, ESPN, Fox Now, Crackle, YouTube, and Vudu. (Full disclosure: there are also apps for CNET and many of its sister CBS Interactive properties, including GameSpot and Last.fm). In other words, you need to pay the annual "Xbox Live tax" to access any of those services through the 360, including otherwise free ones like Crackle and YouTube. Keep in mind that you can get many of those services at no extra charge on a PS3, Apple TV, Roku, or Chromecast. Indeed, a Chromecast ($35) or Roku LT ($50) can be yours for less than the annual Xbox Live Gold subscription fee.
The Xbox One, so far as we know, will also require Xbox Live Gold for online gaming and entertainment apps as well. The Sony PS4 will require a similar PlayStation Plus subscription for multiplayer online gaming, but PS Plus will not be required to access entertainment apps like Netflix. (Currently, the PS3 requires no extra fees for online gaming.)
Bottom line: if you want to do anything fun on the 360 beyond playing single-player games, you'll want to budget the annual Xbox Live Gold subscription into your plans -- or plan on getting one of those alternatives instead.
The current competitive landscape: 360 E vs. 360 S vs. PS3
Like the 360 S before it, the 360 E comes in a variety of flavors, too: there’s a 4GB version ($199), a 4GB unit bundled with Kinect ($299), and the 250GB version (without Kinect) for $299. Since you're going to need a healthy amount of storage for all of the downloadable goodies owning an Xbox 360 has to offer, I really can’t recommend either of the 4GB versions.
As for the 250GB version of the 360 E -- that’s tough to recommend, too. Consider that some teardowns of the console show that the 360 E is a less expensive system to manufacture, but those savings have not in any way been passed along to the customer. The 360 E will cost you the same $299 that its predecessor did -- despite offering one fewer USB port and no optical output.
In the meantime, the earlier 360 S model -- which has that extra USB and optical digital audio port -- is available for the same price or less, sometimes with far more attractive bundles. For instance, the Spring Value Bundle packs in Darksiders II and Batman: Arkham City for the same price of a new (gameless) 360 E. For an Xbox 360 newbie, it's kind of a no-brainer.
Meanwhile, the PlayStation 3 -- which, again, offers the Blu-ray capability that the Xbox 360 lacks -- is available for $270 to $300, in various bundles with great games like God of War: Ascension, Uncharted 3, Assassin's Creed III, and (in September) Grand Theft Auto V, with hard-drive capacities up to 500GB.
Buy the new 360, stick with the old one, or wait for next-gen consoles?
Yes, the 360 is nearing the end of its life cycle, but there are plenty of new titles planned for the platform from now deep into 2014. Likewise, it's important to note that the Xbox One will not be able to play Xbox 360 games; it'll take years for the Xbox One's gaming library to eclipse that of the Xbox 360's.
Of course, it’s the impending November release of the Xbox One that’s the elephant in the room. Do you get a $300 Xbox 360 now, or put that money toward the $500 purchase price of the Xbox One -- or the $400 PS4? If you've waited this long without buying an Xbox 360, it's probably wise to wait until the Xbox One and PS4 are released to see if they pique your interest. Judging from what I've seen and played so far, next-gen gaming will deliver the graphics and eye candy in the short term, but will take a while to really mature into platforms that significantly distance themselves from what is currently available.