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There's more to this story too. As of now, "the latest PS3 firmware has quite a glitch: it makes hard drive upgrades impossible on many PS3 models."

http://arstechnica.com/gaming/news/2011/02/sonys-latest-ps3-firmware-gaffe-hd-upgrades-temporarily-impossible.ars?comments=1#comments-bar

OP: According to Ars, there isn't enough evidence to support the claim of rootkits on the PS3, but well, it's not like this would be the first time this kind of thing has happened.

http://en.wikipedia.org/wiki/Sony_BMG_copy_protection_rootkit_scandal