1. Top 3 Games: Modern Warfare 2, God of War 3, Fallout 3. (In my opinion). If you want to be fascinated by how powerful the graphics engine is, play these games instead: Final Fantasy 13 and Heavy Rain.
2. You can still buy games from the PSN, but not for free. Games come at a cost. Access to the PSN is free, however.
3. You can only copy movie files that you put on the PS3. Movies you download from PSN and onto your PS3's HDD are permanently part of your PS3's memory. (evil file encoding) Makes sense for them to do this anyway as it would be advocating piracy if you could copy files off of your PS3 and share them/sell them to others as a 3rd party provider. Legal issues related to that is why they've implemented unique encoding methods to safeguard their downloadable content.
4. PS3 video formats: MPEG-4 SP (AAC LC), H.264/MPEG-4 AVC High Profile (AAC LC), MPEG-2 TS (H.264/MPEG-4 AVC, AAC LC), MP4 file format, H.264/MPEG-4 AVC High Profile (AAC LC), MPEG-1 (MPEG Audio Layer 2), MPEG-2 PS (MPEG2 Audio Layer 2, AAC LC, AC3(Dolby Digital), LPCM), MPEG-2 TS (MPEG2 Audio Layer 2, AC3 (Dolby Digital) AAC LC), MPEG-2 TS (H.264/MPEG-4 AVC, AAC LC), AVI, Motion JPEG (Linear PCM), Motion JPEG (μ-Law), AVCHD (m2ts / .mts), DivX, WMV, VC-1(WMA Standard V2)
5. If buying a PS3 Slim, do not fret over whether to get the 80gb, 120gb, 160gb, 250gb, 320gb versions. The only difference is the storage space and the price tag. The 80gb one is fine enough and will be plentyful enough to play a wide assortment of games. I'd estimate more than 50 PS3 games for a 80gb version. That's taking into consideration only PS3 games and not the downloaded content from PSN.
You can also burn music onto your PS3's HDD and store it there. So if you wanted to, you could make a playlist, play music while gaming, etc.. It has many customizable features as well, such as the wallpaper theme being changeable by either downloading them from websites or the PSN through purchase.
And finally, the PS3's graphic engine is "slightly" better than the xBox. So if you've got a die-hard graphics fix that needs quenching, PS3 + HDMI cable + HDMI 1080p capable TV is the way to go. Only difference is there are games the PS3 can play and games the xbox can only play.