Yes, Lair is that bad. Not that I've played it, but I've seen it enough to know. It's such a shame. I mean, it's kinda hard to mess up a concept where you're flying a huge-ass dragon and tearing people apart and stuff. Apparently they thought it was hard to mess up, too, so they... didn't even bother making it controllable.
As for the current standings in the console wars, things are turning out exactly like I said they would. The 360 is in this generation what the PS2 was last generation. The semi-cheap one with inferior hardware but TONS of games, many of which are must-haves.
Only problem is, last generation the Xbox still had Halo, Ninja Gaiden, Splinter Cell and a few crazy awesome titles like that to make sure it could still compete. What does the PS3 have now to match what the Xbox had then? It's not looking good for Sony.