I used a friend's PS3 system as my media server for a few months... It can function very well for that, but it has some limitations, doesn't support saving or playback of flac or any other lossless codec, and it sometimes has problems with mp3s, one in a hundred files or so, but annoying nonetheless, it will play it properly, but after playing it, it skips the next file, plays the third file and writes 'corrupt data' on the first one. I hope you got what I mean. I don't know why is that happening, but have seen it a couple of times. I hope that you won't do any serious tagging on it as well, because it's a real pain. Also, it's file organisation could be better. It can only list music by artist, album, etc, and when you enter an artist, it shows tracks immediately. I think it would be better if after entering an artist you choose an album and only then show individual tracks. But it's not much of a problem, really, once you get used to it.
So, if you're happy with playing only mp3, wma and aac on it, will be doing all the tagging and similar stuff on a pc, and can live with all the other limitations, you're pretty much good to go. Btw, I have read somewhere that you can stream flac to it from a pc over a network, but haven't seen it function so can't verify.
Btw, the cooler on that thing was quite loud... I'm not sure if it was that specific system's problem, though, so I suggest you check that as well.
For a short time, I was planning on purchasing a PS3 system myself for media center duties, but will instead be building a PC soon... Those limitations were just too annoying for me, I like things to be very flexible. If you think you can live with that or don't have the expertise to setup a PC as a media center, buy a PS3, it's simple and for the most part functions very well. Otherwise, purchase a PC instead.