Sony drops 20GB PS3 in North America.

[DKII]

The 20 GB still exists in Japan probably because Sony needs to maintain the idea of having the lower price point, since the 360 is a non-factor there.  In NA/EU, 360 acts almost like a price bridge from Wii to PS3, but in Japan it's a direct comparison since you pretty much see only Wii or PS3.