In terms of graphical potential, PS3 is more powerful that xbox. HOWEVER, when it comes to multi-platform games (games on both consoles, like COD, Battlefield, GTA, elder scrolls, etc...) They just look and perform better on Xbox almost all the time.
Basic explanation: The developers don't feel like wasting extra time and money to make the games look better on PS3, due to the difficulty of the cell processors, so they make the games for 360, then port them down to PS3, and they end up looking worse. And a lack of space on the DVD discs.
As for exclusive games, PS3 exclusives look a lot better, Uncharted 3, Killzone, God of War.. You can't get graphics like that on a 360 because of the limited GPU and the limited space on the dvd-disc compared to Blu-Ray.