To quote from this http://www.gamespot.com/news/2005/06/09/news_6127219.html article published today:
Since E3, $ony Computer Entertainment president Ken Kutaragi has been calling the PlayStation 3 an "entertainment supercomputer" rather than a gaming console. Now, he's revealed a new plan to make sure that it's acknowledged as one. In an interview with Impress PC Watch, Kutaragi disclosed that he plans to install the Linux operating system on the PS3's hard disc drive (HDD) so it will be recognized as a computer, rather than a mere console.

But while Linux would require a hard drive to run on, Kutaragi told Impress PC Watch, "We're not going to equip [the PS3 with] a HDD by default, because no matter how much [capacity] we put in it, it won't be enough." It was unclear whether he was referring to the previously known fact that the PS3 would not have an internal hard drive or whether he was indicating that the device would not come with the external 2.5-inch detachable HDD outlined in the specs revealed at E3.

If the latter is the case, then hard drives will be optional--and will cost extra. Kutaragi seemed to confirm this when he said, "There are still some issues if the machine doesn't come with an HDD." Further comments seemed to indicate that there will be more than one model of optional add-on PS3 HDDs available at launch. "We've added a 2.5-inch HDD bay so that users can equip HDDs, such as 80GB and 120GB, even though that's still not enough [capacity]." By contrast, the X-Box 360 will ship with a 20GB hard drive, standard. No other 360 HDD models have been announced, although Micro$oft officials have indicated larger-capacity models could be produced if needed.