As far as we're concerned, this is a done deal. We'd never say it's official without the press release from Sony, but at this point, we're about 99% certain the following is entirely true.
After evidence from several major retailers – Best Buy and GameStop included – showed the 80GB PS3 model was scheduled to be discontinued, a rumor involving a new PlayStation 3 model surfaced. It said we can expect Sony to replace the 80GB version with a machine that sported a gigantic hard drive (at least 120GB), the Dual Shock 3 controller (not yet available in North America), and a price tag of $499.99. Now, SCEE was quick to say such a model wasn't coming to Europe, which may have dampened anxious spirits just a bit. SCEA hasn't issued any reply, besides the typical, "we don't comment on rumor and speculation."
But here's more evidence, courtesy of Kombo- during a GameStop conference call today, it was confirmed the 80GB PS3 is definitely going to be discontinued, and Sony does indeed plan to introduce a PS3 with 120GB (or bigger) hard drive with the Dual Shock 3 controller included. Now, while there is no date for the emergence of this new model, this should be happening "relatively soon." At this point, we think it's safe to say Sony is ready to unveil this model at the Game Developers Conference in a couple weeks time. Come that time, we're pretty confident you're going to see a confirmation for all of this.