In particular a technique using a specially constructed USB dongle enabled the 'backing up' and playing of games (not blu-ray movies or other media) off the PS3's internal or an USB attached external hard drive.
Once hacked, the PS3 is fooled into believing a game is being played from a legitimate Blu-ray disc rather than off the HDD. The PS3 is also enabled to run non Sony sanctioned applications such as home-brew written software.
iTWire has had confirmation of the procedures success. There are a few caveats, including the requirement to have any other PS3 game disc in the drive at the time and also the limitation of external hard drives only working if all files are under 4GB in size.
Talking to the company involved OzModChips has revealed that directors have taken out extensions on their mortgages to invest in the idea, and that over 500 of the USB's had already been pre-ordered at AU$170 each.
At this point the fun rumour and speculation kicks in. Firstly hackers suggest it won't be long before a dump or the PS Jailbreak software will lead to a 'free' version of the technique being available. Perhaps this is why the manager at OzModChips walks with the USB dongle on his person at all times.
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More fantastical rumours involve Sony deciding to remove USB functionality during the next firmware upgrade, that particular rumour made me laugh. In particular the mythical Sony comment regarding firmware upgrade 3.42 'In addition disabling the USB ports will help ensure that PS3 owners will continue to have access to the broad range of gaming and entertainment content from SCE and its content partners on a more secure system.'
Contacting Sony Computer Entertainment here in Australia resulted in the expected response from a Sony spokesperson; 'we don't comment on rumour and speculation.'