firmware 3.50. Some conspiracy theorists believe the rampant failure of these devices is linked to Sony's ongoing battle to circumvent further use of the PS3 jailbreak, which requires a USB tool to activate.
1UP suggests that this issue may be a side effect of Sony's discovery (and subsequent disabling) of "counterfeit" PS3 controllers. A recent consumer alert on Sony's official website states that "SCEA does not support continued functionality of counterfeit or unlicensed controllers in system software updates and these devices may cease to function in the future because of system software updates."
The 1UP report adds that "no third-party controllers that are officially licensed by Sony" have been disabled in the latest update. Considering the affected devices haven't been officially licensed, it's unlikely that a fix will be offered. A SCEA representative told us that "SCE does not support continued functionality of unlicensed controllers."