Apparently, Sony dropped including the PS2 hardware in the 80GB model, and the last version that includes it is the now discontinued, recently price-cut $499 60GB model. If you care about playing older PS2 games and are thinking about getting a PS3, you probably want to get that one, before it disappears. It should also be noted that the HD is user-replaceable, so there’s actually very little tradeoff there.
The new model includes a software emulator, but a fairly large number of the older games have at least some problems.
I’ve really been pretty blown away by how much fun the PS3 is, both for the newer games (which are huge and gorgeous) and for how much better it makes the PS2 experience – all games that support it can play in widescreen, everything’s faster, using the hard drive instead of memory cards is both more convenient and MUCH faster, and the analog sticks are more precise. I think dropping the hardware emulator is an unfortunate cost-saving move that will probably diminish the experience, if you care about that.
Also interesting – I found this list of current and upcoming PS3 exclusives, including PSN (downloadable) games:
I think the PS3 has only shown a mere fraction of its power, and Sony didn’t do even a passable job of promoting it properly at launch, but the slate of games on the list for the next six months and beyond has me very excited.