or just buy a cheap hard drive and mount it in the system yourself.

$90-100 can get you 120+ gigs.

sweet cant wait til they roll out their video on demand service..

Well here's something that's even better in my opinion: music downloads. A PSN version of Itunes pretty much which you can put the music on your PSP from it too. Pretty cool stuff.

I see downloading music much more likely than movies that take forever and I rent 'em instead.

This is also being announced. It basically aleady exists for the PS3 Singstar and now it's gonna be in general too. Singstar you can download a huge selection of songs which should help that game sell more, sounds great if I was into that stuff which I am not at all lol. 

Oops, I meant to comment on that because of the Jack Tretton comment about it on youtube (through the official Sony blog).

http://blog.us.playstation.com/ 

Downloading movie/TV content is the least appealing thing for me on this generation of consoles. I love TV and movies but it's too expensive, too restrictive, and too time consuming to download/watch it this way. I'll stick to Netflix, DVR, and Physical media for this kind of content

I think that is exactly why they may not have moved quicker. Someone had to show how this service would be profitable while not deterring much business from home movie sales. They have to figure out a way to compete with MS but not themselves :)

And you know that music has to be on the way as well, streaming it to my PSP is awesome.

This news had me stoked for the PS3 - one of the 360's main attractions for me is its downloadable HD movie and TV content, but since Microsoft doesn't offer this service outside of the US...

Now Sony, being the rights owners of the movies, don't have the same licensing hurdles that MS needs to overcome for pricing in different regions, which means the service should be available worldwide. This has me gravitating towards a PS3.

However, this is the part that remains nebulous: Are these downloadable movies in HD? If so, wouldn't that hurt Blu-ray sales?  Of course, Sony could simply limit movie downloads to DVD-quality, but that kind of defeats the purpose of having movie downloads because I already have several outlets, both online and off, to purchase or rent DVDs. It's really the HD that interests me.

So, do you really think Sony will release downloadable HD content? If so, will it be feature or time restricted?

I think Ideally there should be standard definition and high definition version downloads of the movies.

HD? Buying one as soon as the service rolls out.

SD? Pass.