Looking at the first week with the PS3. Ran into some snags. Most notably, I received this week's flyer from the well known electronics store where I bought the system. They had reduced the price $100 due to the high Canadian dollar. Fortunately, I was able to get $114 cash back on the system without any hassle. Today I decided to try the HDMI interface, so I went and bought a DVI to HDMI adapter to hook it up to my 900p computer monitor. The digital connection looks excellent. Fortunately, the PS3 does not force you to use the HDMI interface for audio so I was able to hook it up to my old stereo through the two RCA analogue connectors on the original AV cable. Also fortunate is that the PS3 will upscale DRMed DVDs over DVI-D to HDMI interface. Upscaled DVDs look good on a regular computer monitor. Some screens are HDCP DRM compatible now so if you have a 1200p monitor, you should be able to play BluRay at 1080p over HDMI-HDMI. Everyone else is limited to 1080i. This scheme is little more than a ploy to get people to buy new TVs. BluRay should output to 720p and 1080i without an HDCP compatible screen/TV. The vast majority of HDTV shows are 720p so most people won't care.

As for audio playback, I've noticed some problems. It seems the PSP has better audio codec support than it's bigger brother. I popped the memory card from my PSP in and it was unable to playback files encoded using MP4 AAC Low Complexity, using a variable bit rate. The PS3 itself can only rip CDs at fixed bit rates. Files that play fine in the PSP wouldn't play in the PS3. It's worth noting that these files aren't copy protected since I ripped them myself from CDs or encoded them from analogue sources. It could be that Nero Digital encoded them at non-standard bit rates, but if one Sony device can play them, why shouldn't another, newer one?

While on the subject of media, lets just say I had some headaches getting the media server feature working. This was on the Windows end though. Windows Media Player 11 wasn't coopering and kept crashing each time I tried to change the DNLA settings. It also wouldn't let me add files from my media drive. I used NeroMediaHome instead, which is also DNLA compliant and it worked like a charm. When streaming video, using a hard wired connection is highly recommended. The PS3's 802.11g 54mbps Wifi isn't fast enough for for SD and HD video streaming. Going the other way, the PS3 does a good job of streaming local video to the PSP, down-converting the resolution for you. I have yet to figure out how to download video from the PS3 onto the PSP yet. The PS3's remote play feature allows you to control the system via a PSP, though not all games support it.
On the subject of networking, I would have liked to see RSS 2.0 capability on the PS3, just like the PSP has. This feature can be used for live local streaming of audio using RSS Streaming Tools. It's unfortunate this wasn't added. Hopefully Sony will add it in a future firmware update.

On the whole, I believe the PS3 is a good system, though not as solid as Sony's own PSP. Sony could have added a lot more functionality on the media end. Hopefully firmware updates will allow it to support the same features it's little brother has.