"As german site inplaystation.de reports, downward compatibility for the 40GB PS3 will be available this october via firmware upgrade. They talked to a Sony importer from germany who told them, Sony is going to release a new firmware which allows a fully software emulation of PS2 games."
Since Sony announced that they're going to offer downloadable PS2 games in PSN, this rumor sounds believable."
http://playstation.ingame.de/content.php?c=79310&s=429
http://n4g.com/ps3/News-152943.aspx
Good news for 40GB owners if true.
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