I think we've gone slightly off topic here. From what I understand, the old PS3 has come down in price due to the new model, & you want to know if it's worth the price as a blu-ray player & does it upscale DVDs.
PS3 offers a lot more than a standalone blu-ray player. It's a game console, a wireless media player and an internet browser. You can wirelessly play songs & videos from your laptop/PC, & view pictures as well. The 'vidzone' application lets you view music videos for free, if your internet is fast enough. You can surf the internet, including watching youtube etc.
Even as a blu-ray player, it's excellent. It has the fastest loading time (only the Oppo supposedly comes close, & it's twice the price). It's as good as standalone players at the price point in picture quality. The standalone players supposedly offer better audio performance (although I think even the audio is as good as my Panasonic BD60).
The newer PS3 slim can bitstream audio, so it's worthwhile waiting for the review next week before making a purchase. And yes, it's an excellent DVD upscaler.