This move by Sony is flat-out ridiculous.
Cheaper PS3 = good idea
PS3 that won't play PS2 games = ABSOLUTELY FREAKING RIDICULOUS
Way to appeal to the gamers, the gamers who have plenty of PS2 games, and probably even PS games, that they might still want to play... It's not like they can buy a PS3 version of those games, and on top of that, this would mean that they have to keep their PS2, and therefore can't trade the system in to help offset the cost of the PS3.
I guess we'll just be waiting a bit more. We're still waiting for the benefits of PS3 (i.e. seriously great games that we are particularly interested in-they're getting close) to outweigh the crazy cost.
(And yes, I realize that the REALLY HARDCORE gamers bought the PS3 at the $600 price, or more on eBay, but we are gamers with a budget.)