GamesIndustry.biz has discovered the bad news that the upcoming 80GB Playstation 3 will not come with the Emotion Engine chip (the Playstation 2 chip). So instead of being able to play backwards-compatible PS2 games natively, it will be emulating the games in software mode.
This means that games will lose some image quality, performance, and compatibility; some games may not be compatible until Sony releases a software patch to make it run. This is how Microsoft does things with the XBOX 360.
Chances are, the 60GB will also lose the hardware, in order to cut manufacturing costs.
The PAL model of the PS3 sold in Europe and Australia has always lacked the Emotion Engine, with PS2 games running in software. Those gamers have been frustrated with incompatibilities, and Sony isn’t showing too many signs of wanting to work on supporting older titles that aren’t from their “A List”.
With this hardware change, the 80GB PS3 will actually be cheaper for Sony to build than the 60GB version, even though they will be selling it for $100 more. So much for Jack Tretton’s stance of “passing on savings onto the consumer as quickly as we can.”
It’s clear now that the 60GB is the one to get, if you were on the fence about buying a Playstation 3. It is $100 cheaper, although short on 20GB of space (which you can remedy by spending $100 on a 160 GB hard drive and installing it yourself, while maintaining full warranty support), and FULLY compatible with ALL Playstation 2 games.

[...] as soon as the current stock sold out, they would go back to selling a single SKU (presumably, the crippled 80GB version). He said that they would probably sell out of their stock by the end of [...]
how about tearing up my ps2 and putting the chip in the 80gb ps3.