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PlayStation 3 Upgrade Addresses Scaling Shortcomings
Sony today announced immediate availability of a PlayStation 3 firmware upgrade that addresses a number of issues in how the popular game console handles standard-definition DVD and Blu-ray Disc playback.

From a press release issued by Sony Computer Entertainment America:
SCEA is enhancing the PS3 user experience by enabling PlayStation and PlayStation 2 games to be upscaled to HD resolution, up to 1080p. Classic games as well as recently released titles can now be enjoyed like never before.

And PS3 system now has the capability to upscale DVD videos to HD quality (up to 1080p), a feature typically limited to top-of-the-line DVD players. Upscaling games requires an HDMI or component AV cable, while upscaling DVD-ROM (including DVD Video content) requires an HDMI cable and HDMI compatible TV set.
Sony Lip Slip: PS3 May Add DVR & OTA HD Tuner
It seems that no one at Sony can keep a secret -- either that or the Japanese electronics giant is adopting modified guerrilla marketing tactics in its battle against game makers Microsoft and Nintendo.

The recent price reduction for Sony's 60GB PlayStation3 model was one of the worst-managed corporate announcements in recent memory, with everyone who was anyone at all signaling the price drop for nearly a month before Sony dropped out of serial-denial mode and made the official announcement.

Now it appears that Sony is at it again, as reported by the Engadget web site:
It's been rumored before, now Sony's marketing manager for Computer Entertainment in New Zealand has apparently, and likely pre-emptively, unveiled Sony's intentions to turn the PS3 into a digital video recorder.

Sony's Warwick Light is quoted in an interview with New Zealand's The Press as saying, "We're also hoping next year - about the same time that Freeview launches its terrestrial broadcasting service (expected to be in March) - to release a digital tuner for the PS3, turning it into a programmable TV recorder."