Hey, would you look at this? It appears that the long rumored 40 GB PlayStation 3 is indeed a reality. Confirmed for Europe today (still waiting on a US confirmation), the 40 GB model will hit stores on October 10, and will cost €399.
The new model will be Wi-Fi compatible, and will have an HDMI port, as well. The 40 GB model will only two USB 2.0 ports (as opposed to four), and the mult-memory card port has been done away with as well. Sony points out that those last two features can be added at a later date with "readily available aftermarket accessories."
Wanna know something that can't be added with an aftermarket accessory? PlayStation 2 backwards computability. That's right, this new model is no longer compatible with PS2 titles, "reflecting both the reduced emphasis placed on this feature among later purchasers of PS3, as well as the availability of a more extensive line-up of PS3 specific titles." I think Sony worded that last sentence confusing on purpose, as to trick us into thinking that the lack of PS2 software support was a good thing. It didn't work.
No word on a US release (yet), but if we had to guesss, it's a done deal.