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Sony has spilled the beans on the next major firmware update for the PS3. The update is due out later this month though no exact date has been set. The biggest feature of this update is Blu-ray Live functionality. This function will open up downloadable content with BD movies such as ringtones and interactive games. It's hardly what I would call a show stopper, especially given that the promised low-def ripping featured has not been mentioned. Seems to me that Hollywood's HD Illuminati are desperate for any advantage they can get over DVD but I don't think cell phone ringtones is going to do it. Take their last great idea, the Ringle, which was supposed to boost CD sales. The new profile does bring BD inline with HD-DVD in terms of internet connectivity.

Aside from that, 2.20 is going to add some more useful updates. First of all, the one major flaw with DVD and BD playback has been fixed. That is, you can now resume playback where you left off rather than having to start from the beginning, even if the disc had been removed. This has been a standard feature of PC DVD software and higher end stand-alone players for a long time.
Also, Sony said that DivX and WMV files larger than 2gb are now playable. It was possible to play these before but now it's official. Also included for video is "Mosquito Noise Reduction" as part of the AV settings for DVD and BD for improved movie playback. This supposedly reduces analogue and digital compression artifacts.

Sony has also tweaked the web browser for faster loading times. It will also be able to stream non-flash video files. Other improvements add an "audio output device" setting for remote play. This enables the PSP to be used as a remote control for music played through the PS3. This means that you can control audio on the PS3 through your stereo without having to turn your TV on. You can also now copy custom playlists made on your PS3 to your PSP. Not exactly the best update we've seen but it does add a couple of useful features.

Source: PSU
Playstation Blog