amita:professorhat:
Please do provide the documented evidence of this other than "some guy said on another forum / down the pub".
Look it up yourself - you know how to use the internet don't you? If the old PS3 were capable of bitstreaming HD audio, don't you think they would have enabled it by now?
Having asserted that this is 'pretty well documented', it's not unreasonable to ask you to show where exactly!
As for the suggestion that Sony would have made the change if they could, it doesn't ring true for me...Sony could have made all PS3 models backwards compatible with PS2 like the original 60Gb version, but they didn't. Whilst The Prof and Clare both see no reason to 'upgrade' for the sake of bitstreaming, some people might. There is always the risk to Sony that providing bitstreaming on the older models now would prevent some people from shelling out for the new one, so the chance of them doing it seems ever reduced.