Does the PS3 have better graphics than the Xbox 360?
1. Yes, though in most games the graphics are the same. Although the graphics are a lot better when the game has been developed with a big budget and lots of experienced programmers who are capable of writing in the PS3's suited style. Then the graphics are tremendously better and will out perform the Xbox hands down, but this obviously comes with a price and most developers go for the Xbox (more games as you have noticed) as it is cheaper easier and quicker to create them using C# SDK which is provided by Microsoft.
If more big games were made for PS3 then the argument would be put to rest once and for all but as long as Xbox 360 has its easy quick cheap way then the argument still stands. Rumor has it the Xbox 360 has been maxed out since 2007, where as PS3 still has plenty of space for improvement meaning the PS3 will be going strong well after Xbox 2 or Xbox 720 is released.
Another big plus is PS3 has a capacity of 50Gb on Blu-Ray discs but is capable of the newer more experimental 100Gb which means more room for game graphics and physics and inevitably this will lead to PS3 being the leader probably until 2011, 2012 or onwards as Xbox's DVD9 has a capacity of around 9Gb and developers are actually complaining that no progress can be made as there is not enough room, so graphics or game length has to be reduced.
Keep in mind this answer is ONLY based on graphics not the entire experience of owning either console.
2. Playstation 3 utilizes Blu-Ray, which is superior to HD. Thus, it has better graphics capabilities.
3. But the graphics engine on the X-box 360 is way superior than the one in the PS3. The GPU is more powerful, it has more powerful fillrate, and far more pixel and vertex processing horsepower. I won't get into details but the same vertex shader will run much slower on the PS3 than the Xbox 360. The 360 also has a clever new way rendering high definition anti aliased back buffers.
To accomplish the same effect on PS3 is prohibitively expensive. For this reason, many games will have no choice but to run in non-HD resolutions on the PS3 version, use a lower quality anti aliasing technique, or do back buffer upscaling. The end result in all cases is going to be noticeably worse image quality.
So, all-in-all, the Xbox beats the PS3 when it comes to graphics.
4. Yes! Look on YouTube for the difference in games, PS3 has better graphics.