After taking Sony to task for yanking "Other OS" support from the PS3 in their latest firmware update, v3.21, George Hotz - aka geohot - has followed up on his promise to develop a custom firmware build that bypasses the new restriction. The new firmware, which is yet to be publicly released, maintains the ability to install third-party OSes on the PS3, but without the gamer losing access to the PlayStation Network.
Video demo after the cut
"This can be installed without having to open up your PS3, just by restoring a custom generated PUP file, but only from 3.15 or previous. It's possible this CFW will also work on the slim to actually *enable* OtherOS; I'll know when my infectus gets here." George Hotz
In fact, Hotz also reckons that it might be possible to use the new custom firmware on a newer PS3 Slim to enable "Other OS" functionality, something that version of the console never had to begin with. The tweaked firmware must be installed on a PS3 running a version previous to 3.21, however; if you ignored the advice and upgraded anyway, you'll need to find a way to roll your console back before you can try this unofficial install.
Hotz is yet to confirm a release date, but the video demo below does show the hacked firmware in action. Until its launch, you can apparently use a proxy hack to gain access to the PSN while still running the older firmware.