PS2
PROS:
PS2 has a wider library
Since Sony made second generation console backward compatible w/ (soft/hard)ware, the 3rd generation hardware is likely to support the 2nd & 1st generation (soft/hard)ware (in my mind at least.)
Cons:
Um...
Expect for what might call "shovelware" can't think of many.
XBOX:
PROS:
Some good exclusives. I want an Xbox so can play Spawn in Soul calibur (but this is about you not me)
Hack-ability; you can make it a nice little media center from what I have read.
Cons:
Kinda worried that XBOX2 won't support XBOX1 games. Sounds corny, but I won't buy into XBOX until I know that the XBOX2 will play XBOX1 games, and then, I will most likely buy a XBOX1 (I just bought a N64 last month, but again this is about you not me)
All in all, I think you will be happy either. Both can play dvds. If they didn't that would have been a point for me, but I bought the PS2, actually it was a gift 2 years ago for christmas which if I remember was before XBOX came out, but I could be wrong. Both have a good selection of recent games(PS2 just has more.)
Don't worry about the controller though, I bet you can find an after-market controller that you like for PS2.