George Hotz, aka geohot, announced on his blog that he has hacked the Sony PS3.
Geohot is well known for his iPhone hacks and apparently has now found a new playground.
In his blog post geohot says that he has read/write access to the entire system memory, and HV level access to the processor of the PS3.
Geohot is not releasing the exploit or software to jailbreak your PS3 yet. There is still a lot of work to do. In an BBC interview, Hotz says that the hack is 5% hardware and 95% software.
A jailbroken PS3 would allow you to run homebrew software, install again other OSes, run possibly PS2 games and illegally copied games.
Geohot plans to release PS3 jailbreak software once its finished. I am not sure yet what the impact will be and how much trouble for Sony will be arising from this. We will keep on following this story.