most games don't require a big install, 1 Gb or less.  There are exception of course but it is no different than the 4Gb 360 in the way that installs will have to be managed by the user.  The largest install out there is GT5 at 10Gb (which is technically optional and can be as low as 256 mb). 

This is good news. This move will help them drive down costs on Flash which may end up being a big part of the PS4.

wasn't the price of 179$ for the 16gb model pretty much confirmed???

http://us.playstation.com/support/answer/index.htm?a_id=362

You can put any 2.5 inch SATA hard drive in a PS3.  I currently have a 500GB.  1TB drives are about £70 at the moment.

Will not announce cuz stocks level are high? But if they announce, its not their concern if there is still stock on stores. Or it is?

I'd be surprised if it couldn't, but you never know.

I've been saying $150 for the 16gb from the start. Considering its a redesign and the possible rsx-cell 60nm chip, or seperate whatevs, they can get this thing down to $100 for manufacturing so their profit margins are the same if not better given the 3 SKU set up. I think its that low because of the new chips(hopefully they exist) which would allow them to maybe go fanless and the new slide disk bay. The current PS3 runs about $200 to produce right?

It's probably a good thing they are skipping GC because if they do have a RSX-cell chip that thing was rumored to not be made till next year, I'm gussing this was an early leak and Sony is probably trying hard to get this out by the holidays with the possibility of delay into 2013. GC is way too early.

i think it will announce on TGS and worldwide retail before holiday season...

To add, if the manufacturing cost is a little higher they can still break even and make money on the other SKUs. The majority of profits in this industry come from software and services, like PS+. Being able to flood the market with PS3's will boost sales and prime the launch of PS4 with a fanbase, especially if this goes well in the US where PS3 has sold less than the competition. Getting a PS3 in more hands will improve their image and with big games on the horizon this will create an impact on the market, which is important to have during the start of a new gen.

Do you really think this is true? A PS3 for £99? I've got a better chance buying the whole of Sony then it being that cheap! Can't believe people are actually considering it's a possibility. Reality!