To answer some things about the PS3 for you...
1. If you buy a PS3 in America it has around 99% backwards compatibility (and it upscales the games as well)
2. I'm not sure what issues you've heard with the firmwares. At worst, and this is pretty rare, your installation would mess up and do some damage to the system, though it would be covered by Sony. Just remember I've only heard of a few people having these installation problems, and I think they were more than likely flukes. Other than that, the firmware upgrades are nothing but good, as they add new features to the system.
3. Overheating is also not really an issue as long as you give the PS3 some room to breathe. Basically a non-issue IMO.
Also, I've heard that Microsoft made some sort of attempt at fixing the 360's hardware problem with the Elite, but I've still heard of failures.
Honestly, its a tough choice to make at this time, but if your a big SOCOM player and a fan of other Playstation franchises you probably can't go wrong with the PS3 (and SOCOM: Confrontation and some other great looking games come out this fall to boot). There's a lot of negative vibes surrounding the PS3 but it's really an awesome machine and I think its worth the price.
Oh, and if you buy either one, I'd recommend buying from amazon.com. I got free shipping and saved about $60 in tax.

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