A well known group of hackers named Fail0verflow recently exposed some huge security flaws in the PS3 at the 27th Chaos Communication Congress. There's a lengthy and humorous presentation about it here. For people not versed in the subject though it's probably more confusing than informative.
What it boils down to though is a total defeat of Sony's security measures in the PS3. The PS3 has been 'hacked' for several months now. This was basically accomplished by using a USB device to put the console into service mode so it could run 'unsigned' code. Basically anything that doesn't have Sony's official stamp on it. This was easily defeated with new firmware updates that essentially changes the keys used to run code.
What Failoverflow are doing though is giving developers the keys to sign their own code. So, in theory, it could run on any PS3 without modification. This makes it incredibly difficult for Sony to fix. As you have probably guessed, this has some huge ramifications.
Normally I would side with hackers, as I hate being told what to do with the hardware and software I purchased. I love seeing what cool apps and programs people come up with. But this has potential to do huge amounts of damage, and you can be damn sure they're going to hit back even harder. Companies are going to lock down their hardware and software even worse than ever. The cynical part of me says that we are all going to pay for this in the long run. One thing is for sure though, someone at Sony is shitting their pants right now.