It all depends, PCs will cost a bit more in the long run if you are planning to play games. ( Monthly subscription fees, expansion packs, etc. ) You have to make sure the game you buy for your PC will work as opposed to a console on which the game you paid the same money as everyone else for will work just as good as everyone else. Not to mention most stores don't accept returns on PC games. So if you buy a game and it doesn't run on your computer, you are SOL. Not to mention viruses and conflicting programs and compatibility.
Overall. If you are just getting the computer to play games, save yourself the hassle and get a 360. That is after all their MAIN FUNCTION. To PLAY GAMES. I bought a new 360 back in July ( New as in brand new, not another 360 to replace a dead one ) and I haven't had ANY problems whatsoever with mine. Just make sure you take care of it and have proper ventilation and it should be fine.
P.S. a 360 + games WILL NOT cost $700
When I bought mine, I bought the 360 which was $300 new at the time, 1600 Microsoft Points which was $20, 3 games ( combined it was $85 ) a controller charger ( $15 ) and a year of Xbox Live ( $50 ) The trick? Buy USED games and accessories ( EXCEPT CONTROLLERS!! NEVER BUY USED CONTROLLERS )
Total, $470. Cost of the POS video card I have just to get most games to run? $80