I did a bit of research on this very topic a while back, and concluded the PS3 would do well as an mp3 player. But if you're going to use it exclusively for that purpose then there are cheaper options.
Of course, the PS3 is also a decent Blue Ray DVD player, as well as a decent gaming system, so you get a lot for your money. Plus it comes equipped with HDMI, so you can easily connect it digitally to any HDMI capable receiver. It can take external USB drives, so can always add more capacity if you fill up the internal 60GB drive. It also includes built-in WiFi, so you have some networking options that further enhance the solution. The recent $100 price drop only sweetens the deal further.
A couple of weeks ago I actually had one in my shopping cart at BB. But my son talked me out it, simply because there so few games available for it, and because he there are a couple of really awesome Xbox 360 games he really loves. But if games are not your primary concern, then it can't really be beat as a multi-media HT gadget. I highly recommend it.
One more thing; I think the optional remote is Bluetooth, so I don't think you will be able to use any ordinary universal remote with it unless the universal supports bluetooth.
