[Polar]

The newer 360 arcade units have 256 megs of flash based memory internally, this was done to support the new interface.

Generaly the 360 games that aren't region free are the Asian ones meaning Hong Kong/China not Japan

PS3 is region free doesn't matter

Some of the Asian games for both consoles are Chinese/English.

play-asia.com will tell you as such.

In terms of Resident Evil / Biohazzard it would appear the voices can be set to english but more then likely the text in is Japanese

I can't tell you which one is better as I have both and like them for different reasons.

Feel free to PM me if you have other questions.