Even more news in the saga of the continuing discontinuing saga of the 60GB PlayStation 3. We first said it was discontinued, then not discontinued, but now Sony's Kaz Hirai is confirming that they're no longer producing that model. He says:
We're no longer in production for [the 60GB PS3] , so once that product is gone from the retailers shelves, then we're back to the $599 SKU only, so it's not like we have a two-price strategy here in the US market, which we found out very early on, that consumers react mostly to having one SKU as opposed to two.
So in short, the 60GB will be around for a while, and if you want the hardware backward compatibility with PS2 games, you'd better get the $499 model.
AU: Of course we've always had a 60GB unit with no hardware support. Will they keep making units at two different hard drive sizes but the same basic hardware? Or will we see an 80GB update in the not-too-distant future... sadly, it sounds a bit like the price isn't going to shift from $999 here at all.