That's correct. The 40GB PS3 isn't backward compatible, and also doesn't play sacds.
The 60GB is backward compatible through hardware (has ps2 logic boards included).
The 80GB is backward compatible through software emulation (thus not all games are playable).
Thanks for that most eloquent explanation. I really got lucky when I plunked down my money at Costco last summer for a PS3. I was not as informed as I should have been, but it turned out that their deal at the time was on the 60 GB model, so I'm set.
When I was at the mall the other day, considering a PS2 game purchase, all the store employee could tell me was that the 60 GB PS3 was the best one to have. It could play all
the old games, the 40 GB wouldn't play any
, and the 80 GB would play some
. Now I know why! Thanks!