A new report states that the PS3 will initially include the original PS2 chipset for emulation of PS2 and PS1 games. This statement goes against Ken Kutaragi’s previous statements that emulation would be handled through software a la the 360. While this will no doubt allow for smoother emulation, it’s probably also one of the factors in the PS3’s rather enormous price tag.
The chips will apparently be removed in further iterations of the PS3 hardware once the software emulation is ironed out.
—via Evil Avatar
I think even Sony is confused at this point. They should make up their minds!
Personally, I don’t like “smoother” emulation at the cost of putting old hardware onboard. If I wanted good PS2 playback, I use a PS2. If I want to play PSX games, I use a PSX. It’s that simple.