There's a story making the rounds suggesting that the $500 PS3 "Core" system is missing something else in addition to the aforementioned Wi-Fi, HDMI, and memory card support: wireless controller functionality and an upgradable hard-drive. While the Xbox 360 Core system doesn't ship with wireless controllers, it does support them; however, Games Radar writes that "wireless Bluetooth controllers won't be supported" in the lower-priced PS3. Similarly, whereas the Xbox 360 Core system ships sans hard-drive, it is possible to add one and match the functionality of the more expensive offering. Games Radar writes that a "Sony representative on the show floor at E3 also emphasized that gamers won't be able to upgrade the memory of the 20GB version."
Sony's press release (.doc) clearly states that both models will ship with "Wireless controller (Bluetooth)" so, until Sony issues an official statement saying otherwise, we're going to disregard this rumor. The lack of credibility on this one doesn't bode well for the second rumor, that the PS3's hard drive won't be upgradeable.
Examining older press shots of the rear of the system doesn't reveal a removable hard drive solution similar to the PS2's combo HDD and Ethernet adapter, so it is possible that the hard drive is intended to be permanent. The omission of a user-upgradable hard drive would certainly pressure consumers to "get it right" the first time and opt for the more expensive model, further marginalizing and diminishing the value of their lower-priced offering. If the 360's dual SKU's were "confusing" ...
(Update: It appears our skepticism was well placed: readers were quick to point out that the removable hard drive bay is on the bottom of the console when vertical, or on the left when horizontal. Here's an image where you can clearly see the bay. Games Radar is 0 for 2 on this one.)
[Thanks to everyone that sent this in]