So the PS3 will playback JPG photos, Sony's own music format, ATRAC, MP3, AAC, and MPEG-4.
By far the coolest thing is the 3D slideshow view for photos. You can zoom in and out, and it even makes little negative strips from your images. Hot.
But at first, we couldn't get it to read any media from SD or CF cards (didn't try the supported Memory Stick.) It didn't even recognize our USB thumbdrive. Things worked better when we dropped photos inside of folders called "music", "picture" and "video". Weird shit. That's like the PSP's annoying file structure. Tell me Sony, would it have been so hard to scan the entire flash for file extensions?
This is for version 1.0 of the software, and v1.1 is out, but the PS3 didn't let us update. (Maybe the download isn't working yet because the console isn't officially shipping.)