<strong>Update</strong>: Turns out that the report was bogus. <a href="http://exophase.com/ps3/sony-says-no-to-portable-copy-in-ps3-firmware-220-3708.htm" target="_blank">According to Sony</a>, firmware 2.20 will not include Portable Copy.
If a report from PCWorld is to be believed, it looks as if the forthcoming firmware 2.20 release for PlayStation 3 will not only bring BD-Live support, but also support for Blu-ray disc to PSP transfer -- otherwise known as Portable Copy.
Detailed during this year's Consumer Electronics Show, Portable Copy, as the name implies, will allow PS3 owners to copy a standard-definition version of specially marked Blu-ray disc movies to their PSP. It's worth pointing out that Sony's official press release for the new firmware made no mention of the feature, but we'll remain hopeful.
PS3 Firmware Update Enhances Blu-ray Capabilities [PCWorld]