I would like to add a couple points here. First off, I would go with the PS2 (especially if kids are going to be playing). Not only can you play the great titles for the PS2 (Tekken 4 and FFX are f*ckin unbelieveable!!), but it also plays the almost unlimited amount of PS1 games, many of which are some of the best to have ever graced console gaming. Then theres the fact that its a DVD player as well. I know XBox does this also, but it lacks the solid title and upcoming title releases that really define a console gaming system. It is true taht XBox does have a few good titles, but noone can honestly debate that PS2, including all the old PS1 games, completely blows away the XBox.
As for graphics, the XBox does look a little sharper, but on an average TV, it is hardly noticeable if you are at all into the action of the game.
As for consoles being better for RPG's than the PC, I would certainly take you up on that debate. I understand the FF series is almost intended for consoles, but 7,8, and i believe 9 are all on the PC and while I'm not sure about X, i know FF11 is coming out on the PC as well. Then you have the classic (and my personal fav) Baldur's Gate series, which is just amazing for any D&D fan and RPG fan alike. After these you have your Asheron's Calls, Everquests, the upcoming World of Warcraft... the list of great PC RPG's just leaves consoles in the dust.
eh, i'll procrastinate later...