I don't expect something that's ten times better than Xbox Live. I am expecting an equivalent to Xbox Live, but with free online play.
Sony will be making money out of their online service. They'll just not charge the players, they'll charge the publishers instead, for using the centralized servers for the online components in their games. At least that's how I understood it. We will see if they manage to pull it off.
I haven't decided if I'm going for a Playstation 3 or a Revolution so far. I won't get an Xbox 360 because I've already seen it, tried it and played it, and it just didn't impress me. It felt like Xbox 1.5 and not a next-gen machine. What speaks in favour of the Playstation 3 is the fact that I review Playstation 2 games and I have a huge back catalogue of Playstation/Playstation 2 games (never bothered to count them) that I want to be able to play on my new machine too. The Revolution is still a mystery to me, but at least they seem to have their priorities straight and that's enough to get my attention. More fun, not just more pixels on screen!
I hope we'll know more after E3 in May.