Sony has managed to cut the memory footprint of the PlayStation 3 operating system by more than half since the console was launched. Software updates have reduced the software's memory footprint from 120MB at launch to only 50MB at present, giving game developers an additional 70MB of RAM to work with.
While 70MB of additional memory is not insignificant, don't expect drastic changes to future PS3 games. A PS3 developer told us that "any bit of RAM helps. Generally it probably won't change design, but might allow extra effects resolution or dynamic lights or something. Probably more beneficial from the systems and art side then from design/gameplay." In tandem with increasingly efficient code, the added RAM will undoubtedly make for even better looking games. Certainly, that's not something we'd complain about.
Source: Joystiq
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by Thomas De Maesschalck 
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