Sony released the update to add different features that would come in handy. These features include the ability to backup your SD cards, USB flash drives or memory sticks directly on the PS3 hard drive. Another welcomed addition is the inclusion of HDD formatting. If you happen to put something on the PS3 that makes it do crazy things, you can bring it back to factory defaults like nothing ever happened. Of course, just like any reformatting option, it'd completely erase anything extra that you placed on the drive.
What you will not see in this update is the promised fix to the 1080i resolution bug that has affected the launch devices. Earlier, Sony had released a statement saying that they would fix the bug in the firmware that did not allow it to properly display 1080i resolution, but instead bump it down to 480p. Instead of fixing this issue, they merely changed the heirarchy of display preferences so that 1080i was near the bottom of the list. Sony has since retracted its statement in that they will fix the problem. Future updates will tell whether or not they will address this problem.
Source:
Impress
Written by: Dave Horvath @ 6 Dec 2006 8:07