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This weekend Gizmodo (linked above) has tested out the PS3's external video storage from the not-so-recent PS3 Firmware 2.70 update, and they have confirmed it works as intended.

To quote: You can back up your purchased videos to any external USB drive, be it a flash drive or a standard USB hard drive. The video will show up on in a backup folder inside the drive, but you can't stream directly from the drive.

So it's not like you can connect a 1TB USB hard drive and dump all your movies onto there for on-the-fly watching. You're limited to whatever space you have on your PS3's drive for storage, but you can swap in/swap-out from the external drive with relative ease.

So yeah, nice job Sony for putting out this video backup. It's great for the person who downloads a lot of movies from Sony's PSN service, which has a surprisingly decent selection for a service that's not that old.

PS3's External Video Backup Works, But You Can't Stream

PS3's External Video Backup Works, But You Can't Stream

PS3's External Video Backup Works, But You Can't Stream

More PlayStation 3 News...