You won't be "wasting" your money if you buy either an Xbox or a PS3. They are both fantastic game consoles.
If you go down the Xbox route you have 3 choices. The more money you spend the bigger the storage you get and also a better selection of video leads.
Whether you need the storage depends how you are going to use the console. For example if you son is going to connect to Xbox live and download lots of games, then more storage is better.
Also Microsoft just announced that latter this year that it will be possible to load games onto the hard disk and play them from there. The advantage will be that load times will be better and the very noisy DVD drive won't have to spin.
If you buy the cheapest model you can upgrade most things later albeit at a premium. The only unique thing about the top of the range Elite model is that it has an HDMI port and is black.