engadget thinks that there may be an HDD in the PS3 after all:

However, we were struck by the statement in a BusinessWeek article about the PS3 that the console would boast “a huge hard disk to store photos, music, and TV shows.” Given that the article appears to get just about everything else right, and was written by Japan-based reporter Kenji Hall — who apparently had direct access to Sony brass — it would seem odd for this to be simply a mistake. (And Hall seems to know his Sony history, pointing out elsewhere in the article that the failed PSX did have a hard drive). It looks like the case of the PS3 hard drive goes back into the unsolved mysteries file for now.

I have to admit that I gotta take this with a huge grain of salt. Sony’s looking at an expensive machine already, and their main competition isn’t requiring an HDD. So I severely doubt that all PS3’s will come with an HDD bundled in.

But I wouldn’t mind being wrong.

Engadget – PS3 to have a hard drive after all?