Damn I need to get one of those 160GB PS3's ! Lol, I'm starting to run out of space.

People should understand the reason they keep updating the HDD capacity is because they get cheaper and cheaper from the factory Sony buys them from. They get 250 GB and 320 GB for the same price now (most likely) so they figure its best to pass on the good fortune to consumer at no extra cost to them but see a nice boost in sales for a while because of it.

This is what happened with each HDD upgrade to my understanding. Just to keep track there has been a 20GB, 40GB, 60 GB, 80GB, 120 GB, 160GB, 250GB, and now finally 320GB.

There won't be a $100 price cut. $50 at most

It's because i use my PS3 to watch TV, so i record movies on that and stick them on an external. I used to use my PC, but PS3 is just more convenient. I spend much more time in my living room than my study in the last couple of years.

Still have my release date PS3, a dying breed. Best console ever made (as long as you keep it cool!).

I have had to mend it once, and have opened it up a few times to maintain and clean it.

If I were to guess (and it is nothing more), I would guess that it really just comes down to drive wholesales. I'm guessing the 120 GB is completely discontinued, and would cost more to keep making versus the 160. (Secondary theory incoming later.) Likewise, the cost difference between the 250 and 320 is non-existant (or cheaper for the 320), so that is also getting replaced, also to further drive the value difference between the 2 systems, and encourage people to get the more expensive system.

Or, as a longer shot, I have a hard time finding drives under 250 GB in stores. It may be that Sony is dropping the 250 GB retail drive, and thus, rather than making more for the PS3, just upgrade it to the new low-end drive- the 320 GB. The 120s and 160s may actually be a combination of leftover unsold retail drives and refurbished drives. They're running out of 120s, so it's time to upgrade those to the more plentiful 160s. This method would cost Sony nothing extra, and in fact, would save them money for recycling older parts not suitable for retail anymore. But controlling the inventory levels is a pain without making more, so that's why I call this a long shot.