Firmware update 3.50 for the PlayStation 3 not only added full 3D compatibility for Blu-Ray movies, but it has also disabled several third-party devices.

This according to an update at the official PlayStation boards , which confirms that 3.50 has disabled "75% of 3rd-party USB Adapters." This may also impact some third-party controllers, too, if you read the explanation:

"Counterfeit PlayStation®3 Wireless Controllers, which are practically identical in appearance to genuine PlayStation®3 Wireless Controllers, have been discovered in the market. SCEA advises consumers to be cautious when buying PlayStation®3 Wireless Controllers from uncertain sources as the quality, reliability and safety of counterfeit products is uncertain, and in some cases, may be dangerous. It is possible that some counterfeit product may ignite or explode, resulting in injury or damage to the user, your PlayStation®3 computer entertainment system, or other property. Moreover, SCEA does not support continued functionality of counterfeit or unlicensed controllers in system software updates and these devices may cease to function in the future because of system software updates."

Basically, the controller won't work if it connects via USB and if it isn't licensed by Sony; there are plenty of third-party controllers that should function just fine. Obviously, this is in response to recent hacking attempts, which have seen much publicity on the Internet. For the most part, we recommend Sony-licensed accessories at all times…I distinctly recall losing 30 hours of Front Mission 3 and the first 5 hours of Vagrant Story data on an EB-branded memory card…