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The 40 gb has the 65nm CPU, but the graphics chip is still the same size at the original. I think sometime later this year they will reduce the size of that as well.

Don't worry about it though, as all it does is reduce the manufacturing costs for Sony. It will not make your system any better. I do think the 40 gb PS3 is the best if you are not worried about backwards compatibility (although I bet some day in the future, a patch will re-add that ability). Due to the smaller die, it uses less fans (or the same number at lower RPM's), and thus is quieter. I see you have a 360 though, and any PS3 in comparison will sound super silent next to it. If the fan noise of the 360 does not bother you, then no worries on what PS3 you get.