The box states: "This product has limited backwards compatibility with PlayStation and PlayStation 2 format software ... visit www.us.playstation.com for system software update." We're attempting to find out if the new 60GB versions rolling off the assembly line will also switch over to the BC software. So, if you're really into your old PS and PS2 games, might want to check and see if they are compatible with the software or get a system currently available before the switch.
*Update: From Dave Karraker, Sr. Director, Corporate Communications regarding the red light: "It is just a lighting trick. Nothing different or new about it."