This question is the hardest because it all depends on who is playing the games. In general, the younger the player the more tuned in to Nintendo they will be. Older players then are split between the other systems.
The best advice I can give is find the games you're interested in playing and buy whichever system has the most games you want to play. Personally, for me, that means buying an XBox. If I were still 17 or 18 I'm sure I would lean toward a Playstation 2. Take another 10 years off the age and you've got someone jonesing for a Game Cube. Speaking in general terms of course. Most of all be aware that everyone has their own personal bias (yes, even me.)
"Where can I find it?"
FINDING the system you want is a whole other deal. Both the XBox and Game Cube will be in short supply this Christmas. I suggest a little dilligence and visiting large retailers like Best Buy, Circuit City, Target and Wal Mart. They will get the largest shipments and have the best chance of maintaining stock.
Forget about E-Bay unless you like paying premium prices for suspect product (one poor woman paid hundreds of dollars for an empty box!) There are plenty of legitimate online retailers such as 800.com, Amazon.com and ebworld.com that won't charge high-way robbery prices and won't rip you off. Of course, that being said, there are online retailers that are less reliable (buy.com for example.) You can (and should!) check out any retailer by seeing what their customers have said about them at Google Groups before handing them your credit card (type the name of the retailer and the product in the search field, for example: "buy.com +Playstation")
Many retailers are offering bundles only, you buy the system, two games of their choice and a few other products. Usually these bundles include items you don't want or need and can be more expensive than buying all the items in the bundle individually. The bright side is that bundles tend to almost always be in stock at places like Software Etc, Babbages, Electronics Boutique or Circuit City.
"How much should I spend?"
As far as payment, it again depends on the features you're looking for. My price point for consoles had been $200 or less for decades. However when my DVD player started showing signs of old age I didn't think twice about spending $300 on an XBox. Games are going to be $50 each regardless of the system, except for clearance software such as that for the Sega Dreamcast.
"So what else do I need?"
Well, if you want to have more than one player then you need to buy a second controller. Video game consoles haven't come with two controllers for about10 years now. Unless you get an XBox then you will also want to get a memory card. Back in the day you could save games without a memory card because cartridges had their own battery inside, that's not possible when your game is on a CD or DVD. The XBox has a built in hard drive for game saves and you only need a memory card to take a saved game to a friends house. Beware memory cards not made by the people who made your console. They are NOTORIOUS for losing saved game information.
If you have an older TV set then you will need to get an RF adapter. If you look at the back of your TV set and do not see three little plugs in a row (a yellow one for video, a red one for audio and a white one for audio) then chances are you need to get an RF adapter. This will connect your game system to the coaxial jack on the back of the set. If all you have is 2 screws for an antenna you'll also need a 300 ohm adapter from Radio Shack, but by this point you should probably just spend the money on a new television set.
"What about Bundles and Extended Service Plans?"
Well, these two items serve really only one purpose. To make dealers money. That's it. That's all they are about. Electronic hardware has a notoriously low profit margin (in fact, the hardware manufacturers themselves, Microsoft, Nintendo, Sega and Sony all LOSE money with each piece of hardware sold.) In order to make up for this retailers sell high margin items like third party controllers and memory cards so they can make more money. The good news is that because you don't get to choose the items in your bundle most people shy away from them and the stores that sell them usually have some in stock.
Extended Service Plans are 100% pure profit because all they are selling you up front is a promise. The only good bundle is one where you get to choose the items yourself. As a rule controllers and memory cards made by anyone other than Microsoft, Nintendo, Sega or Sony are pieces of junk (Mad Catz seems to be the exception.) The only good service plan is one you have to use. Manufacturers generally have a 90 day guarantee (Gameboy Advance is one year), after that all bets are off. However most service plans are for 3 years and at the end of a 3 year period if your machine goes dead it's easier and cheaper to replace the machine than it would be to use the service plan.
That being said, there were problems with early machines from both Sega and Sony and there have been some (mostly false) reports that Gamecubes and XBoxes are having issues. If you're worried about your short-term investment then a service plan provides peace of mind.