There are three choices in a video game console purchase, and each have their strengths and weaknesses.
The Xbox 360 is a great choice for a system, but it lacks a Blu Ray player. Sony makes Blu Ray, so no surprise there, although Microsoft did release an add on HD DVD player before the format died. For online play the Xbox Live service will cost you around $40 for a 12 month subscribtion. This is a definite weakness, as the PSN (Playstation 3's online gaming) is free, but Xbox Live has a better experience in my opinion. Another great feature that was added around a year ago is Netflix streaming. With this fantastic feature you can stream (with very little to no buffering if you have high speed internet) a ton of older movies and tv anytime you want. There are newer movies as well, but the selection is limited. That being so, this is still a great way to revisit some old classics and find some new favorites you may have missed all along. One thing I do not dig about the Xbox is that Microsoft seems to enjoy making you pay a premium for their accessories and add ons. Unless you buy the Elite bundle, then you pay extra for a hard drive and the headset (so you can talk
The Playstation 3 is another great choice, and may work out better for someone looking for a more complete out of the box system. It has built in Blu Ray, uses any bluetooth headset for online gaming (including the one you use in your car), and has a built in hard drive. Sony definitely seems to have the more complete package, but it just wasn't available when the Xbox 360 was. People buy what is available, and the result is a lot of people that bought a system earlier just bought a 360 instead of waiting for the PS3 (Hint Sony: don't wait so long!). Netflix recently enabled the software on the PS3 as well, but the weakness is you have to put a special software disc in. This isn't a big deal, but the Xbox version is silky smooth software that downloads, so you never have to mess with a disc. The DVD player for Playstation 3 upconverts your DVD's so your older movies will look a little better than you remember, and this is a strength that Xbox does not have.
The Wii is an interesting system that is targeting a different audience than the other two. The main draw is the interesting controls, where you actually move the controller to see movement on screen. Very cool, but can feel a bit gimmicky after a bit, unless you find a game you really love. Nintendo seems to have taken a page from Microsoft's book in that you will pay extra for the Nunchuk (required for some cool boxing type games) and the Wii Motion Plus (required for some really cool new games). Not that big of a deal, but if you are expecting to have everything out of the box you may be miffed to find out you have to go spend more money. The price point for the Wii is definitely a strength, as it is the cheapest system, but you may be disappointed with the graphics. The graphics do not hold a candle to some of the lifelike visuals you will see on the Xbox or the PS3, but Nintendo is banking on their controls and immersive gameplay to make you not care.
All three of these systems are a great choice, but if you are buying one for a teenager, I would probably not buy the Wii unless specifically requested. The Wii just doesn't have the best variety of titles, and the controls can be funky, especially for first person shooters.
Buying a video game console is a big expenditure, but can be a good entertainment purchase if you will actually enjoy and use it. As long as you do not go crazy buying all the new games, you can probably keep your entertainment budget down. Most games have a ton of hours of gameplay in them before you will be done with them. This can bring the "per hour" price much lower than other entertainment choices. Read reviews on sites like IGN.com and Gamespot.com and only buy games you really want, or use Gamefly.com (here's a link to an older post talking about Gamefly and other ways to save money) to reduce the money you spend for games.
And you thought this was gonna be a "never buy video games because they cost money" hatefest!