The number of retailers dropping it from their inventory was a telling sign and Dave Karraker made it official- the 20 GB PlayStation 3 system is being officialy discontinued, making the 60 GB system the only configuration available.
In the statement he said, "Due to the overwhelming demand for the 60GB model from both retailers and consumers, we have ceased offering the 20GB model here in North America. In addition to the larger internal hard drive, the 60GB PlayStation 3 features added storage media slots and built-in Wi-Fi not found in the 20GB system. Based on retailer and consumer feedback, we have decided to focus our current efforts on the more popular 60GB model."
Any 20 GB systems that may still be available out there will still be sold at their normal retail price of USD $499. Also, those of us with the system now will still have the full benefit of the firmware upgrades and any other services given by SCEA.
The 20 GB system is still available in Japan- there has been no word on if/ when things will be changed there.