SONY need to be applauded for this feature. They obviously understood that space will be a premium as more music, video, games and (soon to be) TV programs are stored by the user.
They did not crap on about piracy issues (which was a thin vale byXBOX for the real reason, if you have to buy proprietary upgrades, the user will pay more) ... they just made the console better, easily upgradeable without compromising the console and removed region locks on games (taking away the only real legitimate reason for modding).
Just some notes regarding the upgrade I did on my PS3;
1) Unlike the guides I saw on the net, you must have a copy of the latest PS3 update on an external device, saved to /PS3/Update. After it installs this update, the restore prosses is as per the examples on YouTube.
2) Don't use the back up you created on another PS3, even if you have the same user accounts on it. I did and although it reinstall the user accounts, it did not transfer any game data. My 60GB PS3 is now empty and I need to download all purchases and updates again. (I am so looking forward to this ... the PSN is so fast!
3) Once you have installed the new HDD, make sure it is attached to a TV that can handle all the resolution outputs the PS3 can do; in this case the lowest (default) setting. I had it attached to my computer monitor when I was working on it and my monitor stated the output signal was out of range when I turned the PS3 back on.
4) Make sure your PS3 controller is attached to your PS3 via USB cable as it no longer recognizes the controller once you install your new HDD.
5) Be very,very gentle with the screws on the HDD caddy. They are very soft and you will thread the screww heads if you are to forceful. Good news is though, little force is required to move the screws. Also make sure you use the right sized phillips head screw driver, this will reduce the risk of damage to the screws.