Before I drill down to the PlayStation 3's various features, I should mention the technology that has gone into the console. It may not entirely justify the controversial pricing, but it does explain the graphical appeal, not to mention the vastly improved physics and environmental (including lighting) effects.

Weighing about 11lbs and measuring 12.8inx3.9inx10.9in, the PlayStation 3 is certainly larger than the PlayStation 2, the diminutive Wii, or the Xbox 360. As with those consoles, the PlayStation 3 can be oriented vertically or horizontally. Either way, the PlayStation 3's striking design looks right at home in the living room – although its polished top surface is prone to finger marks. The PlayStation 3 runs more quietly than the Xbox 360, but is a bit louder than the almost silent Wii. Although the unit itself doesn't get too toasty, the air around it tends to feel warm after a few hours of continuous play.

The PlayStation 3 comes in two versions. The $599 (£317) model has a 60GB hard disk, built-in 802.11b/g wireless networking and MemoryStick, SD, and CompactFlash slots. The $499 (£264) unit omits Wi-Fi capability, media card slots and it has a 20GB drive. You can replace the hard drive on either version.

But the differences end there. Both PlayStation 3 versions provide a Blu-ray slot drive, HDMI-output, gigabit networking, four USB 2.0 ports, and built-in Bluetooth 2.0 support.

At the heart of the PlayStation 3 lies a CPU that'll impress even the most hardcore PC gamer. This powerful, multicore cell processor, jointly developed by Sony, Toshiba and IBM, runs at 3.2GHz. An RSX Reality Synthesizer graphics engine, based on nVidia's G70 architecture, delivers the graphics. Working alongside these chips are 256MB of high-performance XDR main memory.

Getting started

If you're lucky enough to score a PlayStation 3, ensure that you come home with all of the cables you'll need. To fully experience the console's graphics capabilities - that is, to play supported games or watch Blu-ray movies in 1080p high-definition - you'll have to purchase your own HDMI cable (and own an HDCP-compliant 1080p television). Two extras that you might consider buying are Sony's proprietary component video output cable and the optical digital audio cable required for 7.1-channel audio. For optimum Blu-ray or DVD-movie playback, you could spring for the optional remote control.

The standard package includes basic cords: a USB mini cable for the bundled Bluetooth wireless controller, an ethernet cable, a multi audio/video cable with composite connections and an AC power cord. The PlayStation 3 uses a standard cord, unlike the external power brick used by the Wii and the Xbox 360. Most PlayStation 3 owners will fire up the console without looking at the manual - and they probably won't run into any trouble. It's that easy to hook up.

Once turned on, the PlayStation 3 will ask you to choose a language and a time zone and set the time and date. You then create a user account, sign in and are presented with a navigation interface that Sony calls the XMB (Xross Media Bar), which closely resembles the interface employed by Sony's PSP (PlayStation Portable) handheld.

My first priority was to properly configure the high-definition output. I accomplished this by navigating to the video settings and changing the unit's output to 1080p over HDMI.

I couldn't wait to hear how the PlayStation 3 audio sounded through my high-quality music production monitors. I attached the audio connections on the supplied composite multi audio/video cable to my speakers, then set the PlayStation 3 to send audio over that route. The result: easy setup and great sound.

In the PlayStation 3's system settings, I noticed that my new unit's hard disk had 52GB of its 60GB total available, while that the operating system was version 1.00. However, the first game I loaded - NBA 07 - included the 1.02 system update and installed it before I could begin playing. Although the installation took only a few minutes, having to wait was a little frustrating. The PlayStation 3 manual says some games have their required updates built-in to help you avoid having to patch via the internet.

Let the games begin

Internet connectivity and high-definition movie playback aside, consoles are all about the games. And massive exclusive franchises such as Halo (Xbox), Metal Gear Solid (PlayStation) and Zelda (Nintendo) promote gamers' allegiance to a single console. Whether a PlayStation 3 launch title such as Resistance: Fall of Man becomes such a classic remains to be seen. But the PlayStation 3 games that I've played so far have been ridiculously fun. Bearing in mind that I can't test the multiplayer or online functionality until the PlayStation 3 officially launches, here are some early thoughts:

NBA 07

This addictive basketball game runs in 1080p resolution at an incredibly smooth 60 frames per second. The players' movements are responsive and fluid, the digital Shaq looks similar to a sweaty version of the in-the-flesh Shaq, while the courts seem almost photo-realistic. It's a better game all around than the PlayStation 2 version, although regrettably there still isn't any commentary. Load times were pretty slow - about 15 to 20 seconds - to begin with, but once the game automatically copied information to the PlayStation 3's hard disk, times improved dramatically.

Resistance: Fall of Man

This first-person shooter is my favourite PlayStation 3 game so far. Levels feel expansive and atmospheric, but the graphics, while top-notch, fall somewhere between how a PlayStation 2 game and a PlayStation 3 game should look - particularly with regard to the textures of the bad guys. The game plays at a solid 30fps (frames per second) and supports 720p resolution.

Genji: Days of the Blade

This was my least favourite title, even though I'm a fan of slash-/beat-'em-ups. Load times improved once frequently used game data was automatically copied to the hard disk. The graphics looked superb and being able to switch characters instantly or to embark on a matrix-style slow-motion killing spree in midfight was great. Nevertheless, the gameplay as a whole felt a little tired, as though I'd played the same game too many times before.

The PlayStation 3 is backward-compatible with most PlayStation 1 and PlayStation 2 games, but to hedge your bets you might want to buy the optional Memory Card Adaptor, which allows you to transfer saved game information from PlayStation 1/PlayStation 2 memory cards to the PlayStation 3's hard disk. Even then, early reports indicate that various problems have plagued a bunch of games. Tekken 5, for instance, is said to lose background music on the PlayStation 3.

The PlayStation 3 controller

The new wireless, motion-sensitive SixAxis controller lacks force feedback, but it's lighter than the PlayStation 2's controller and has larger L2 and R2 triggers. And because the PlayStation 3's controller can sense motion along six axes, you can turn and tilt in three-dimensional space to steer in driving or flying games. I've had limited opportunity to test the controller's motion aspects so far. But a few of the launch games, such as Ridge Racer 7, should invite extensive use of the motion-sensing capability.

The controller connects to the PlayStation 3 wirelessly via Bluetooth - within a 65ft range - and can recharge its batteries, which Sony says will last for 30 hours, when plugged in via the supplied USB cable. To check the controller's remaining battery life, you hold the PS button - located between the analogue sticks - for two seconds. You'll then see a battery meter for that controller on screen, plus an option to turn the console off. You have to press the PS button when you turn the unit on; otherwise, annoyingly, the console won't recognise the controller.

A second PlayStation 3 controller costs $50 (£26) and the console supports up to seven players at a time. Each controller has four little LEDs on the top, which indicate the number that the console has assigned to that controller.

Xross Media Bar and web browsing

The Xross Media Bar interface is surprisingly responsive and navigating around it feels snappier than using the Xbox 360 dashboard. Though the XMB lacks the 360's coloured tabs, the PlayStation 3 interface has a better, less-cluttered layout overall. That said, the XMB has quite a few unexplained menu options that are hardly intuitive. Even a rocket scientist might have trouble deciphering what Key Repeat Interval or UPnP - Enable/Disable? mean without a few moments of head scratching.

Small gripes aside, Sony has made the most important features and settings extremely easy to use. The parental controls are clear, while configuring a network connection (wireless or wired) is a breeze.

I was pleasantly surprised that you can plug in a USB keyboard and thereby avoid the horrid pre-emptive text-entry interface altogether. Bluetooth keyboard/mouse support is supposedly slated for a future system update. I can't overstate how much easier it is to deal with network settings or to browse the web when you use a dedicated keyboard.

Launched from the XMB, the PlayStation 3's web browser isn't the speediest thing on the planet, but it did load pages - including Flash videos - reasonably promptly. You can set bookmarks, browse through your history, and make text bigger or smaller.

You can use the D-pad to jump the cursor between page links, while one of the analogue sticks functions as a mouse. You may open a maximum of six browser windows simultaneously and the console lets you switch between them in two different ways - pushing down on a stick enables you to preview and switch between all open windows, but pressing the controller's R2 and L2 buttons lets you switch between browser windows while sliding them across the screen.

The Blu-ray experience

From the outset, Sony intended the PlayStation 3 to serve as an all-purpose entertainment console, with tendrils that extend well beyond the realm of game play. But can the PlayStation 3 hope to compete with standalone Blu-ray players from consumer electronics makers?

The short answer is yes. The PlayStation 3's movie playback experience is best if you start from scratch, inserting a disc into the front-loading slot just as you power up the unit. The unit took just three seconds to load the movie Underworld Evolution, followed almost immediately by the opening sounds of the PlayStation 3 start-up orchestra. The screen then blacked out and loaded the movie disc; total disc load time, from insertion of disc to start of playback, was nearly 24 seconds.

Matched side-by-side with the Samsung BD-P1000 Blu-ray player, the game console delivered noticeably sharper and crisper image quality, with more depth and more detail than were visible on the Samsung.

Sony's decision to omit the remote from its package seems inconsistent with its positioning of the premium PlayStation 3 as an all-encompassing entertainment device. It's worth noting that Microsoft includes a remote in the competing Xbox 360 box. But even if you pay for the remote to make the PlayStation 3 the entertainment-centric package it's designed to be, you'll be spending far less than you'd pay if you bought a dedicated Blu-ray Disc player today.

Multimedia file playback

Dedicated areas in the PlayStation 3's XMB handle music, videos, and photos. Two things caught my eye: videos played in thumbnail previews as I quickly flicked through them; and one photo-viewing mode - called Portrait Slideshow - uses real-time-generated graphics to foster the feeling that you are placing photos on a surface for friends and family to thumb through.

The PlayStation 3 supports common file formats such as AAC, JPEG, MP3, and MPEG-4 video, but I had no luck with any of the numerous WMV (Windows Media Movie) and WMA (Windows Media Audio) files I tried to play. In all probability, users will be able to play back more multimedia formats than the PS3 supports out of the box if they install Linux. Already, Linux distributor Terra Soft has announced that the PlayStation 3 supports its Yellow Dog distribution.

The PlayStation 3 can play music CDs, access song information from AMG (the All Music Guide) and copy/rip songs to its hard disk. By default, it does so in AAC format at 128 kbps, but you can create MP3 and ATRAC files if you prefer.

PlayStation online store and network

Because Sony won't fully enable the PlayStation 3's online features until the official US launch on 17 November, I can't evaluate how well they work. But we do have the latest details for you.

Sony has said that, unlike Xbox Live, the PlayStation Network will be a free service. You'll be able to see when friends are online in order to chat with them by video, voice, or text, or to join multiplayer games. Early feedback following the Japanese launch of the PlayStation 3 is that currently users can leave only text messages for other gamers. Reports further indicate that you can't read messages while in a game, you simply get a pop-up notification.

Sony has stated that it intends to offer downloadable game demos, movie trailers and to sell retro games, episodic content and perhaps eventually even full-length movies at its PlayStation Store. Methods to pay your bill will include credit card and special PlayStation cards sold in shops. Downloadable games that Sony has developed will cost less than $15 (£8) apiece at launch. And you can expect new titles from a range of developers to appear regularly.

Parting thoughts

So there you have it: the PlayStation 3 in a rather large nutshell. It truly is technologically superior to both the Xbox 360 and the Wii (which isn't really a direct competitor). But to succeed, Sony and its third-party partners must tap into their traditional strength of delivering compelling games for the console. The PlayStation 3 looks expensive at first, but seems less so when you compare its cost to the cost of a standalone Blu-ray player, a high-end PC graphics card, the Xbox 360 with its HD-DVD add-on, or even a media centre PC.

Melissa J Perenson contributed to this piece