This is classified as a rumor, but we really hope it's as RumorReporter
says and consider it more of on the Report end, rather than the Rumor. We've kicked the whole "replacing hardware backwards compatibility with software" story to death (and we've got one more post to go on it, actually), so you know all about that. But now, an "anonymous industry insider" (who else gives us these rumors?) tells us that Sony is toying around with something else, beyond the 1.60 firmware update coming up soon.
HD upscaling of specific PS2 and PS-One titles is rumored to be in the works for, possibly, summer. We're not talking about 480p support -- the internal PS3 upscaler will move these games into 1080i/720p! Just think how some of your favorite games would look if they're supported by the PlayStation 3 into 1080i/720p... it's almost legendary in awesomeness. Let's hope we get more official word on this closer to summer.