Seems like the PS3 has finally been hacked. You'll find a ton of information relating to the thing in this thread: http://neogaf.net/forum/showthread.php?t=404565 (OP really needs updating, but scan through some of the pages and you'll see the info unfold).
Short version: USB stick turns PS3 into debug unit. Allows homebrew and installation of games onto a HDD (basically enabling piracy).
Pretty damn impressive to have held out for this long... and I guess I shouldn't be surprised that the nutters worked out a way after Sony decided to remove Linux from the console. Remains to be seen how Sony will combat this, but I'm expecting it to end up in a similar situation to the piracy on the 360... you basically don't go online. I'd also expect some of the upcoming games to have mandatory firmware updates (with security improvements to stop the hack).