I didn't know that had removed the Emotion Engine chip from the European version of the PS3. Maybe this is why the release date is really so much later than the other region releases? After all they would need to do some motherboard redesigning. The removal of the chip will definitely reduce manufacturing costs for Sony and hopefully help bring down the cost of the console soon.

But as you say, removal of the chip will definitely reduce compatibility to begin with, but once the firmware starts to be updated it should be just as good as any hardware solution.

I just thought. If this is completely in the firmware they must be emulating the PS2 pretty well in software. If some emulation hackers can get hold of the firmware and disassemble it they might be able to reverse engine a pretty good PC PS2 emulator. Just an idea.