As I recall Killzone was touted as THE FPS Halo killer. Turned out that claim was far from the truth. As far as I've seen the only FPS Halo killer turned out to be Halo 2.
GTA3 was a killer app (not for me, since my psyche rebels against playing sociopathic criminals) (ed: note, I prefer sociopathic good guy's ala Dirty Harry and Coogan) and due to Sony's predatory practices, signing Rockstar to a five year exclusive contract, sold a lot of PS2s. I'll point out that Sony's strategy in this case is a commong strategy shared by more than game console makers. It is also one that is unlikely to work with the more popular game developers again. I state this based on Rockstar's console choices after the exclusive GTA series and their choice to port their GTA series to the XBox.
The developers of Rebel Assault 3 have gone this route, and it's certain that Sony paid them to be exclusive to the PS3. Nothing wrong with that. Microsoft has paid others to be exclusive to the XBox (and most probably the 360). There is anothe class of XBox and 360 exclusive games, however. These are games that, by their nature, require the Xbox and/or the 360 hardware and as such would be foolish to develop for the PS2 or PS3. Prime examples of this would be KOTOR and Morrowind. They are limited to a console with a hard drive because of the size of their savegame files and because of the amount of game information. Other game manufacturers enjoy the ability to cache game information from the DVD to the hard drive.
Sony has made the choice to limit the ability of game developers to create certain types of games, but its current audience don't require those kinds of games.
Microsoft is producing a machine that will be able to play the Sony style games and play the kind of games that I and others chose the Xbox for. Dropping the HDD is a serious mistake (and one they have plenty of time to retract).
Sony has two advantages. Japanese nationalism and its production is so far in the future that it can change hardware specs as it wishes for about the next year (if you believe Sony's release date) or the next year and a half (if you believe UBISoft's estimate). Microsoft no longer has that luxury having already shipped Alpha machines to developers and (if EA's estimate early this year was correct) final dev machines this month.