PS3 Firmware Update

Sony has released the latest 1.70 firmware for PS3, laying the groundwork for playing downloadable PS1 titles on the console itself, and improving backward compatibility with PS2 peripherals.

Long announced and in development, the latest firmware update has finally promised to give players the chance to play the PlayStation Network's selection of downloadable PS1 titles on the console itself -- as opposed to just on the PSP.

At this time, however, it appears PS1 downloads will have to be enabled by Sony to work on the console itself, including re-downloading games bought earlier than this latest update, so current compatibility is limited, at best.

The firmware also adds the ability for players to transfer save data from the PSP to PS3, giving them the option to seamlessly continue games whether at home or away.

The new system firmware is available by selecting the system update on your PS3 console.  Unfortunately, the North American firmware page (to my knowledge) has yet to be updated for offline updating.