[SteveR]

I worked at Sony and heres the major difference- the 80gig has all three hardware systems inside it (PS1, PS2, PS3). This means you can play any PS game ever made on that system and it will upscale the graphics for you if its a PS1 or 2 game. The new 120gig is a hardware emulator. It does not have the physical PS1 and 2 systems inside of it. In order for you to be able to play a PS1 or PS2 game on the new systems, Sony has to release the updated version of the game as a download patch for the 120gig PS3. Its the same concept for what Microsoft does with the xbox 360. If you have an old xbox game an you want to be able to play it on your 360, Microsoft would have had to released an update for the game so when you put it in, it'll work. Its a way for Sony to save a lot of money in production costs for the PS3, but it means that you wont have 100% backwards compatibility. So, if you really like your older games and some of them are obscure titles that you dont think Sony will release patches for, then try and find an older system like the 80gig. I got my brother one last summer when Sony tolds us they would be discontinuing them. Like Paul said, they are out there somewhere, but probably in obscure places.