Originally posted on Engadget,Poor, poor Sony. First PSJailbreak splayed wide the PS3's security model, now PSGroove has arrived calling itself the "open source PSjailbreak." The code must first be downloaded and installed onto a $30ish AT90USBkey or a $25ish Teensy++ USB development board. After that, homebrew enthusiasts can then execute unsigned third-party apps and games on their PS3. At the moment, the ability to boot ISO files (read: pirated or "backup" games) is temporarily disabled. But we're sure that some of the internet's more nefarious types will find their way around that. Cat, welcome to the world outside of the bag.
Their Original Source
Personally im hoping for a homebrew community similar to that like the PSP had a few years ago
..PSGroove's code got ported to the PIC18F2550 chips.. I won't give details 'cause of forum rules related to modchips, but googling should get you to where you want to go 