There was software available that allowed users to use PS3 Linux to help PCs convert HD movies into X264 format. The software has since been abandoned because newer PS3 firmware disabled OtherOS completely.
When you're not playing games, PS3 Linux is actually pretty nice to use. Don't forget you can do multiple things in PS3 Linux, while you are limited to running only one homebrew app at a time in the PS3 OS. Maybe you want to be able to play a movie on PS3 Linux while you transfer FTP files to the PS3 HDD.
Obviously GameOS works excellent, but PS3 Linux (OtherOS) has advantages as well.
The most important part of this news is that we will finally have the ability to examine a jailbroken PS3 firmware that still has OtherOS enabled. This should make it easier to compare what was changed/removed, and port OtherOS to newer firmware versions, allowing everyone to update and play the newest games.
This is certainly a step closer to bringing OtherOS back. Who knows, we may find new exploits on OtherOS, such as decrypting some of those firmware files. If I remember correctly, GeoHot's exploit through OtherOS gave him full access and the ability to decrypt files (But don't quote me on that).
I'm sure we are all waiting to be able to use 3.50 jailbroken, or at least get PSN access, but show some love to the other users out there who are still on older firmware with OtherOS. They deserve some attention as well!
Linux was still very useful even in it's limited state. Using Firefox on PS3 Linux allows you to view sites that often don't work in the horrible PS3 Browser. Even PS3NEWS.com doesn't display correctly all the time in the PS3 browser, and it's frustrating. With a jailbroken PS3, there could always be advancements with full hardware access that were obviously not possible on the locked-down official firmware, enabling a more pleasant experience.