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Ars Technica: Penguin Power on PS3? Probably.

“Ever since the announcement of the PlayStation 3’s November
release date, the Internet has been abuzz with discussion over the
promise of Ken Kutaragi’s brief mention of Linux. However, as
Kutaragi has been known to make statements that were subsequently
changed (for example, in 2005, he said that the hard drive for the
PS3 would be optional) many people held off on assuming that their
shiny new PS3 would come prepackaged with Penguin goodness…”

Complete
Story