Yes PS3 and PSP with my 5 year old.
I'm a gamer at heart, and the first game my son has shown any real interest in is Lego Star Wars for the PSP and now the PS3 (we bought both because he loved the PSP game so much). He absolutely loves it, and the puzzle solving in the game is fantastic for developing logic skills. When he started out he couldn't figure anything out and was constantly asking for help, and a month later he was figuring out complicated puzzles on his own. I highly recommend this game as a very good starter game for kids, and it's great fun for me too.
My son and I have also been playing the new Burnout Paradise game demo on the PS3 as well, and that game has been great fun for us.
The reason I think the best value lies in the PS3 is because it has things for kids and adults, gamer and non gamer alike. The PS3 happens to be the BluRay movie player and best high definition movie player period at the moment. So even if you don't game, and your kids do, you can get use out of the system as a high def movie player for your HDTV, and the picture is nothing short of spectacular. I mean, it's really great. I'm a movie buff, and a gaming buff, so this machine is just the ultimate for me, and I've never been happier with a piece of electronics.
The PS3 also happens to be the best picture viewing device if you have an HDTV. Nothing beats a crystal clear 46" view of your pictures. Nothing.
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