You can expand that storage yourself, if you're so inclined
Anyone looking to pick up a new and cheap PS3 is in luck, as a flash-based 12GB SKU has shown up at retailers. The low-storage model sells for $199.99, and is the smallest stock hard drive offered in a PS3, as Sony has always tried to emphasize the digital marketplace.
For those not concerned with all that downloadable racket, this might be a nice pick-up. Of course, the small hard drive can be negated if you have an external storage device sitting around, as those are supported through the system's USB ports. The 12GB PS3 is for sale at Best Buy in America; Canucks can nab one at FutureShop.