one of 2 things:
Firmware update - possible, although I don't really know why there would be this kind of hype behind it...unless the thread a while back about all of the features it would include is true.
40 gig PS3 for $300 - I think this is the most likely one of my 2 assumptions. If this is true, it's not a price cut, it's a brand-new sku, and console sales will definitely see an immediate increase when it's available, if it does become available. It's a great way to increase sales without lowering prices on your current models.
Unfortunately, I don't see 3 SKU's working for Sony right now..I think the 40 gig would be a temporary SKU until they can sell the 80 at the same price, bringing the 160 down to the current price of the 80 gig @ $399.