PS3 is the way to go IMO. constant firmware updates, the ability to use it for audio playback from PC (wireless even), gaming (if your into that). Movie rentals via playstation store, etc.
It'll fit in a standard av stand/shelf, as long as your not standing it on end. You can use the controller for playback, sort of an inconvenience, but it works. You could purchase the remote for BR playback (25 bucks) but why bother, what controls do you really need more than play/pause/stop/ff/rew? its all available using the controller.
For the money, and what you can do with it, PS3 all the way.