Wall of text follows... TL;DR version: Got a PS3, thanks for the recommendations, COD4 and GH3 are a hoot, the PS3 sucks as a wireless streaming device (any help there appreciated).
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Well, I got a "deal" on a "3rd gen" 80gb model. Not a great one, but I saved enough over a slim or 80gb w/ BC to offset most of the cost of GH3 (with wireless guitar) on Amazon, so not to terrible I suppose!
Anyways, GH is fun and my wife will at least play it (though she claims to not really like it - she hates anything she isn't good at right away

I might rebuy a GameCube just to get her Mario Party again

). I rented COD4:MW and over the course of 4 days blasted through the single player game (on easy mode; I have no pride when it comes to this sort of thing)! What a blast that was... going to rent the Orange Box this week so I can (finally) play Portal... not really interested in HL2 (for shame, I know) - played through about half of HL2 on my iMac (boot camp) and was unimpressed. I think I just prefer the "realistic" shooters, or hybrid RPG/shooter type games? Maybe it's my "old Army self" coming through.
Anyways, point of this post is to first say THANKS to everyone who recommended games. Gave me enough leads to look into and decide to grab a PS3.
Second, I want to say that as a media device the PS3 is absolute rubbish. I was really, really disappointed when I got it home and found that it was completely incapable of streaming media wirelessly. My ATV can handle the same exact files over the same network (in the same exact place in the house) with ZERO issues; so I know it's not a network issue. I can load the files onto a USB drive and play them on the PS3 without issue (though it's inability to see the AC3 track is disappointing), so I know it's not a file incompatibility issue. It's just that the PS3 is complete rubbish as a media front end.
The Netflix instant watch is great though (and ironically enough the PS3 can wirelessly stream Netflix's "HD" movies over the internet, which are about the same bitrate as my DVD rips, without issue) and as a DVD/BD player it's certainly adequate. So, my hopes of bundling together a Netflix streaming box ($100), DVD player ($40), and an ATV ($150) and getting a free gaming system in the mix were dashed. In the end, I got a Netflix streaming device and a DVD player (I have no real use for a BD player at this time, but it will be nice to have one someday, I'm sure) and only paid $100 for a gaming system. Not to shabby, I guess. Maybe someday Sony will get off their ass and fix this thing. Or maybe Apple will upgrade the ATV and I will get a good deal on an old one or want a new one enough to end up with two.
Anyways, now that I have played some games I'm quite excited about my weekly free time to play more! Thanks again - and if you have any recommendations about getting the PS3 to work properly as a wireless streaming device, I'm all ears!