It didn't take long for the "open source PSJailBreak" to make it's appearance. 12 days in fact.
The original PSJailbreak was being sold for $170, the cloned one (x3jailbreak) was selling for $30, and now you only need to pay $20 for a USB development board and copy over the software. Or if you wait a little longer you can just use your jailbroken iPhone, iPod, and even a TI-84 calculator or jailbreak your PS3. As mentioned before though, you'll see some significant drops in vendor prices (once they're allowed to start selling the original Jailbreak again.) =]
It only plays homebrew at the moment, and the "pirate feature" (ability to boot ISO files) is temporarily disabled.
Exophase has more details on the new open-source implementation called PSGroove. As mentioned though, right now a programmable USB flash chip is required (Teensy USB dev board) but other methods will be made available in the near future.
So, apparently the PS3 has finally been hacked.
The manufacturer's webpage (http://psjailbreak.com) is currently down, but the USB Dongle is available from OZModchips (Link) at a debut price of $170.
Prices will eventually drop (you know, that whole supply and demand thing) if that's a little out of your price range. =]
The dongle, called "PS Jailbreak" allows you to copy your original PS3 games onto a FAT32 hard drive, and play from there. It was designed for the latest 3.41 firmware, however it works on some of the older versions as well.
Other than that, it's for PS3 games specifically, so you cannot dump PS1/PS2 or Bluray movies. It's very user friendly, does not void your warranty (you do not need to open up the case), and online play currently works with it.
I'll be following PS3 hardware and software sales numbers to see if this will actually have any impact on piracy rates.
* Update (08/20/10):
Apparently the dongle might not be anything special and can be cloned onto most USB devices. There's one version floating around right now that only functions on dev kit PS3's. It might not be too long before we see a USB image for retail PS3's on torrent websites. I'm sure we'll find out soon enough once people's orders start arriving (could be a JIG dongle with some minor protection to protect sales.)
Don't get impatient with this one, there will be plenty of people releasing trojan horses that will either infect your PC or brick your PS3. Wait until it's fully tested by other foolish users. =]
$170 is a little pricey, but it will probably drop when you start seeing the image available. And of course, the vendors will issue many warnings about where to obtain the USB device from. You'll see some standard scare tactics like: "Torrent sites can't be trusted", "Risk of trojan", "Risk of ruining for PS3", "Buy from us, you can trust us." etc. etc.