I think of when Sony where thinking of there 10year product and marketing strategy, they had the 60GB PS3 in mind, with all its backward compatibility and additional hardware on it, not with the 40GB console.

If you can find one of these old 60GB consoles with the PS2 emotion engine in it, i suggest you purchase it. Im not sure how the backwards compatibility thing works on the 80GB console, some sort of emulating sht, but works worse than the older consoles from what ive heard.

But when i transferred my 60GB data on a backup device, then onto a new 160GB HDD, everything seem to work all good. Hey did you make sure the removable HDD you put your backup data on was a FAT32 format? Not a NTCS or whatever its called. That might be the cause of your problem.