With the impending release of the 80 gig PS3 Sony has updated their backwards compatibility site to include that model. The "Emotion Engine"
chip, which allows almost flawless compatibility with the PS1 and PS2, is not going to be included in the new model due to cost cutting measures.
While the lack of the chip shouldn’t change the way that any PS3 games are played, it means that the new 80 gig systems resemble the Xbox 360 with dozens of "partial compatibility" PS2 and PS1 games.
Link: http://www.us.playstation.com/Support/CompatibleStatus
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