Once again, it's how do you defind "BEST". The PS3 is the most versatile blu-ray player. It's firmware has constant upgrades and updates (via internet) to do new things. The last update actually allows the PS3 to deconde True HD sound. This means that you dont need to have a receiver that has the capability to decode Ture HD sound, as long as it has HDMI connection.
I read an article (I will try to find later tonight. At work now, company firewall blocked out a lot of sites.) saying that a (or some) stand alone Sony blu-ray player actually provides smoother picture quality than that of the PS3. I'm not sure what Sony is doing, or what they are going to do later. It could be they are trying to drive the sales of their stand-alone blu-ray player. I'm not sure that this "better smoothness" can be or will be provided (or fix) on the PS3 via updates.
As far as DVD quality wise, the PS3 actually out performs some of my older stand-alone DVD players. Not only that, I used to have a high-dv Sony dvd player, and the picture quality is comparable with the PS3. That's why I dont agree that the DVD quality of the PS3 is inferior to any stand-alone DVD players out there.