Any Updates on PS3's Backwards Compatibility?

Sony recently won that lawsuit involving the emotion engine correct? There was talk that BC could now easily be patched in to new firmware updates, I havnt heard anything since, was wondering if anyone knew what was up.

We haven't heard anything new. I'm less and less encouraged that it will ever happen. 

It wont happen. I'm guessing PS2 downloads in the PSN Store. It makes me love my 60 gig PS3 even more.

The leaked Sega document regarding Sony's plans for the PS3 & Dreamcast suggest that Sony has a B/C emulating software working and plans to include it to run downloadable PS2 titles.  I doubt they will enable that software to run disc based PS2 games since they are moving towards a direct download business model as evidenced by the PSP-Go.  I guess this will work something like the Microsoft Xbox Originals game shop.  Maybe I am too cynical, but I think Sony sees that there is still money to be made off 7 and 8 year old titles, so rather than give the consumer the option of going to Gamestop and buying Sly Cooper for $5, they'll sell you a downloadable version for $20.  
 
@Smarter_Martyr said:

" ... It makes me love my 60 gig PS3 even more. "

Of course, they would make us pay for digital games instead of letting us play the games we have already bought and love. *sigh*...

f you wanted BC why didn't you just get one of the BC models(or *gasp* a ps2) instead of hoping they somehow magically upgrade an inferior model you bought later for free? If I buy a 1985 used car from GM. I'm not going back to the dealership now demanding ABS and power door locks for free am I?

Are you? You might try it. What if it works? That'd be a pretty good deal, you know.

Though actually, I have to point out that your analogy would make more sense only if there was ABS and power door locks in the 1970 model. A better example would be a Chevy Cobalt. That thing is crap. Manual locks and windows brand new, to top off everything else about it sucking, and not even a good price.