I am thinking about doing an internal now too...
I do have some minor issues. The drive comes on and shuts off with the PS3, but after a while, the drive "wakes up" with the PS3 off. Not sure what is up with that. A SATA 120G 2.5" drive is $89, same as I just paid for this 320...and 160 is $150. It will do for now, so I guess I will just keep my eyes open for a good deal on drives.
*edit - I found SATA 80G for $53, 120G for $85 and 160G for $109 locally.