Confirmed by the Sony CEO, is that the 60GB model is going to go away, just like the 20GB model. The price drop is only for the 60GB model, and only lasts until the remaining stock is gone.
Since all future versions of the PS3 will lack the physical chips that powered the PSX and PS2, all backwards compatibility will be done via software. So it will inevitable suffer in the near term, and could persist for quite some time depending on how diligent Sony is about improving the emulation software in the PS3 firmware. So it may not be a bad idea to keep your old PS2 around a bit longer. Maybe even pick up a new one just as Sony is about to stop production on them, so you have a fresh one if the drive on your current one ever gives out.
I don't own a PS3 myself, and am not really interested until FFXIII and/or Kingdom Hearts 3, but I don't really think you can store things on external drives with the PS3, only read from them. If you're willing to void the warranty, I understand it's pretty easy to replace the PS3's HDD with a larger one, but I don't really see the point until someone cracks the firmware allowing you to store backup copies of your games on the HDD for playback, or creates an Xbox Media Center like program.
I've been reading a lot of posts and people give different reasons for the price drop including the addition or replacement of the 60gb version with the 80gb version. Will the 80gb version be less compatible with PS2 games, or is will it just have a bigger hard drive? Also, i also see that many mention using external hard drives, how well does that work? If external hard drives work with the PS3 then getting one at lower price might not be so bad.

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