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With regards to technical ability, Xbox is way better. Better graphics, better audio, more memory for bigger levels. But that's to be expected since it came out a year later.
With regards to number of games available, PS2 has more.
With regards to type of game available, Xbox has more in the sports and 1st-/3rd-person shooter genres, while PS2 has more puzzle games, RPGs, and platformers.
PS2 is cheaper.
Longer-term, the Xbox 2 is scheduled for release next summer, and the PS3 sometime after it. There is disagreement as to whether the Xbox 2 will be able to play Xbox games, and though there's no official word that I've heard, it's reasonable to expect based on Sony's history that the PS3 will be able to play PSOne and 2 games. Most developers will stop making games for older consoles once the newer ones come out.
It really all comes down to what you want out of your console.
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