Question might be reasonable if you asked about the Xbox 360.The Xbox was not even a match for the PS2 in it's capabilities
No but your warranty will de void.
It gives you a console suspension from the Xbox LIVE Service. Where you Xbox 360 console will be usless where it cant be used anymore.
To answer your actual question even the PS2 is better than the Xbox and a course the PS3 is. You must have meant the Xbox 360, but then you would still have to exclude the cheap $200 model. Each...
If you really want to know if its better... go watch all parts http://www.youtube.com/watch?v=fARdxkovMhQ