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calling all blu ray owners: Is this normal?

Actually, the original 20 and 60 GB PS3s are the best for backwards compatability, as they perform the function through hardware. The first batch of 80GB PS3s were backward compatable through software emulation. I thought all were PS1 backwards compatable, but I'm not sure if this holds true for the new slim.
No, what he means is that the new PS3 slim won't play PS2/PS1 games. It will play DVD's.

All PS3 models will play PS1 games, even the Slim.

I have two PS3s. While I do play games on them, they definitely get more use as a media player (Blu-ray, Netflix streaming, DLNA streaming...). Heck, I even use them to share photos with guests visiting our house.

Blu-ray should always trump digital cable / satellite for video and audio quality...much higher ratio of quality to compression. Something is definitely not right...
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All PS3 models will play PS1 games, even the Slim.

I have two PS3s.

That needs a bit of clarifying also.
If you have two that play all PS1 games then you have one of the older versions. If you have one of the newer (slim) designs, it will play some select PS1 games but not all of them. I went directly to the Sony website and read the information provided concerning the playability of the older games on the PS3 and that is what it stated.
I have been trying to find a list of the games that it will play to see if we even have them or not. If I can't find a list, I'm probably not going to buy the PS3 as then I would have to buy all new games also. Along with another controller, remote, etc. I haven't really looked at the games on the market for the PS3 since I don't have one but it seems like most of them out for it are only either fighting game, evil looking creation games, or war games. I'm not really into any of that type of thing and I'm certainly not going to let my 8yr get into them either.
Well, I went around today asking folks if they knew of the list or how I could get my hands on a list of PS1 games that can be played on the PS3 and everyone had the same answer of 'no'.
So, I guess I won't be getting one of those then.
Might just concentrate on finding a nice dedicated BR player.
Might just concentrate on finding a nice dedicated BR player.
Keep the prices in mind. The two main added features I wanted in a BR player was built-in wireless networking and Netflix -- and for most of the standalones, once you added those features it approached the price of the PS3 Slim; so I just got the PS3.

I haven't yet played a game on it; maybe when GT5 comes out.