So what is the difference between the two, and what do you need to know?

The $499 version will come with a 20GB Hard Drive and a bunch of little things.

The $599 version comes with everything you will need.

The $599 version will have a 60GB Hard Drive, built in Wi-Fi, a memory card reader, and HDMI output! Yes, you just read that right. If you buy the $499 version, forget about playing back Blue-Ray DVDs at the correct output of 1080p.

For the person who doesn’t yet know how important HDMI is, that is the new way of hooking up your system to your TV. You know how we all used to use a yellow wire that carried the video signal to your television; in the future we will all use HDMI. This wire will be as important as any part of your system, and Sony is only making it available on one version of the PS3. Pretty shady if you ask me.

If you are just planning on using your PS3 to play games, HDMI will not matter. You can buy the cheaper one and be good. But most of us who will buy a PS3 will hope one day to use it as a Blue-Ray player, so Sony is essentially forcing us to buy the more expensive one.

Another thing that came out tonight is Sony’s goal of shipping six million units by March 31, 2007. Their goal is to have two million units on launch day, two more million by the end of the year, and another two million before their fiscal year ends, March 31^st.

Can you say massive worldwide shortage?

Think about how few six million systems is. Also think about how hard it has been to manufacture Xbox 360’s, and that isn’t even brand new technology like a Blue-Ray player. I have said this before and I will say it again. They will not even come close to meeting worldwide demand, let alone demand in Japan.

Another thing that I have to talk about is the price. No matter how good the system is, $600 dollars is a lot of money to a lot of people. And that doesn’t include any games. By the time you go to pay for the system, an extra controller and maybe two games, you are looking at almost $900 dollars after tax. This will not be an impulse buy.

Microsoft right now is smiling. They have a great system that will have plenty available come Christmas. Another thing is, if there is anyway to shave the price down on the 360, they will do it. Imagine walking into EBGames or BestBuy and for say $350 you can get the high end 360, or, for $600 a PS3. Most people are not rich, and that price difference will be a big competitive advantage to Microsoft, I don’t care how much better the PS3 might be. And for now all the reports say it is just about the same as the 360.

I am not saying the PS3 won’t win the war, as it probably will. What I am saying is perhaps Sony is putting too many of their eggs into this Blue-Ray player, and what ends up happening if it goes the way of Beta, or HD-DVD ends up being what consumers really want....

Other notable pieces of info.

The new Sony PS3 controller will be motion sensitive, similar to the new Nintendo Wii controller. And the controller will be wireless.

Plenty more coming tomorrow night, after I have been to the Nintendo press conference and part of E3.