The legendary (or is that notorious?) Team Xecuter have announced some details of their PS3 project, currently codenamed HYPERDRIVE.
Source: Team XecuterFeatures:
Connect any 3.5" SATA Hard Drive to the PS3
Developing ability to connect IDE hard drive
Supports upto 750GB (maybe more thats all we have here)
Switch between external HYPERDRIVE and internal 2.5" HDD
HYPERDRIVE USB2.0 Support to dump data to/from HDD
When you connect the system announces the drive requires formatting etc and then promptly begins to prep it. All system settings are unchanged so they are stored internally to the PS3 and not on the HDD.
We can assure you that larger hard drives will be essential in the near future. After speaking to colleagues from the Playstation Scene, booting games from HDD is possible and not far off. As the games are blu-ray (17gb+ dumps available) then the larger HDD the better, and you wont get very large and cheap 2.5" drives, however 250GB 3.5" drives are close to $60 these days.
We may release a simple adapter first so you can hook up with ease right now rather than wait for release of the HYPERDRIVE, that won't take too long at all to release.
Product pics / more info soon.