Looks like someone finally figured out how to hack the PS3, and it was done through a USB drive Dongle (Thanks Nikkom).  So much for Geohots fancy hardware hacks.

It appears to be real, but who knows how long it will last, or if it even works on all models of the PS3.  The USB allows you to save games directly to your HDD (I think) via booting the PS3 in a different mode that gives you access to features that I guess only developers had previously?  If anyone can figure out more about how it works, I'd be interested to know.

The downside is apparently it takes a long time to download games to your HDD from the BD drive.

Video, Forum, Homepage.  Video 2 

Hmm still doubting..

Back in the days PSX-Scene werre pretty reliable.. are they still now? Cause if they claim it.. i tend to believe it..

I smell bullshit. And Sony will probably have a FW update ready..

I was pretty skeptical at first, but I read some of the forums and people swear by this OCZModChips guy.  He seems legit, so unless he's been fooled it looks real.

The major problem is transferring 40 Gigs of data takes time, so its probably not really worth it in the long run =/.

@godofwar: Something like this?

PS3 Firmware (v3.42) Update

The next system software update for the PlayStation 3 (PS3) system will be released on August 25, 2010 (JST), and will disable the USB ports that are available on all PS3 systems, launched in November 2006. Due to security concerns, Sony Computer Entertainment will remove the functionality through the 3.42 system software update.

In addition, disabling the USB ports will help ensure that PS3 owners will continue to have access to the broad range of gaming and entertainment content from SCE and its content partners on a more secure system.

Consumers and organizations that currently use the USB ports can choose not to upgrade their PS3 systems, although the following features will no longer be available;

• Ability to sign in to PlayStation Network and use network features that require signing in to PlayStation Network, such as online features of PS3 games and chat
• Playback of PS3 software titles or Blu-ray Disc videos that require PS3 system software version 3.42 or later
• Playback of copyright-protected videos that are stored on a media server (when DTCP-IP is enabled under Settings)
• Use of new features and improvements that are available on PS3 system software 3.42 or later

Additional information about PS3 firmware updates, including v3.42 (once it becomes available), can be found here: http://us.playstation.com/support/systemupdates/ps3/index.htm

PS3 owners who have further questions should contact Consumer Services: http://us.playstation.com/support/ask/ 800-345-7669 (800-345-SONY)

What an epic fail scam...they're trying to sell these USB drives..

In the YT video, pause at 0:43 ... Uncharted 1's disk is there. But when the guy tries to load R&C:TOD, turn up the volume at 1:23, you can hear a disc coming out...they probably change Uncharted with Ratchet when the PS3 is not being filmed. 

Pause at 1:31, the Uncharted BD icon is missing ! 

Scammers are full of scam.

I think this was already confirmed as bullshit on Neogaf and other sites...

Breaking ! : Sony to release Firmware to remove USB Support!

Actually not.. at Neogaf they are speculating that the makers got hold of a dev usb dongle (not stick, dongle: http://en.wikipedia.org/wiki/Dongle ) and a leaked SDK.. time will tell if it's real or fake..

If legit, this could be huge....