I am shocked that some of you guys don't hear the fan! I have a PS3 in my dedicated theater, and the fan is driving me NUTS! It is quiet for the first few minutes of operation, then it is extremely loud, and HOT. I don't have any active air management in my shelving (which I will need to correct) but it is on a shelf with about 12" of clearance above and behind the console. My receiver and projector both run hot, but the PS3 just COOKS! Also, it is MUCH louder than my projector (Optoma HD70) and my HD DVR cable box. If I could get Sony to replace it with a new unit, that ran cooler and quieter, that would be GREAT!
I also agree with the poster about the sensitivity of the controller. That too drives me crazy. I haven't bought the add on remote, or done the PS2 workaround which would alleviate some of that grief for me. Every movie I watch gets interupted at some point by an inadvertant bump of some sort. WOW, that is annoying. A simple IR port on this thing would have solved that problem.
I don't game much, but my 5 year old LOVES the demo's I have. He is always wanting to play motorstorm. I love the option of playing a game, downloading stuff, etc. It is also nice to have music on there, though I don't use that option all that much because it is in my dedicated theater, not my family room.
Those are my major gripes with the PS3. Even with those gripes, I can't seem to see myself getting rid of it for a standalone, especially now with what I consider excellent upconversion. I watched Night at the Museum last night with my kids, and I literally had to check to make sure I didn't have a Blu-Ray version. It looked fantastic, and the DTS soundtrack sounded great as well.
Now this though..... I think I will sell my 60gig with my games I currently have, as well as my BR movies. Then, I will take that money and buy a used 20gb model, and the Tosh HD-D2 from costco for $250. I REALLY want the Matrix Trilogy. I would then be format neutral, and would probably use the HDDVD player for SD playback, simply because I wouldn't have the noise or heat.... I should be able to get both for what I sell my package for, at least close to what I sell me package for.
Here is a pic of my shelving, before everything was finished. Trim is done now. I moved the PS3 down about 6 more inches for more breathing room! Still hot and loud.