If the only difference between the models is a 40GB hard drive, thats one thing, but did Sony "tard pack" the cheaper version of the PS3? That's what it appears according to this spec sheet directly from Sony. According to the pdf, all of those are exclusive to the version of the PS3 that will cost $600 when they are released this fall. This is a very odd strategy from Sony, while we still have doubts about Microsoft's ability to support HDCP with their HD DVD add on, it is odd that Sony would split their market of potential Blu-ray customers. Analog outputs would still give you 1080i high definition, but no all-digital twin-1080p HDCP protected loving like we have been dreaming about since the last E3. Stripping WiFi cancels much of the PSP functionality shown, and what is backwards compatibility if you can't transfer saves on a memory stick?
Say it ain't so Sony, say it ain't so.
Check out Joystiq for more E3 coverage, including the first official pics.