Sony PR man Ryan Bowling stopped by the GameSpot offices to do a PlayStation 3 demo for yesterday's On the Spot. He arrived an hour early to give us some hands-on time with a retail unit featuring the final shipping hardware. He couldn't show us the PlayStation Network features because it's still a work-in-progress, but he did walk us through most of the cross media bar options. I'm covering the backward compatibility testing first since a lot of readers have been asking about it.

Here's the PlayStation 3 sitting next to the 1080p HDTV we bought in preparation for the HD era.

Slide in a PS2 game and the PS3 will recognize it as a "PlayStation 2 Format Disc."

Before launching the game, the PS3 will prompt you to create an internal memory card on the hard drive to enable game saves.

Gran Turismo 4 loaded just fine on the PS3.

The PS3 doesn't do anything special to improve image quality for PS2 or PS1 games, but GT4 has built-in support for 1080i.

We used Battle Arena Toshinden 3 for our PS1 backward compatibility test. 

The PS3 ran Toshinden perfectly but couldn't do anything for the decade-old graphics. Finally, we tried out a Japanese version of Kingdom Hearts 2 to see how the PS3 handled region locking for PS2 games.

The new console can play PS3 games from any region, but it looks like the system will obey region restrictions for games from older PlayStation platforms.