Just to echo all the others...
Yep, it's an excellent Blu-ray Disc (BD) player [one of the best around, going by various reviews I've read], & also does a great job of upscaling DVDs.
It is region locked for both, however.
e.g. a UK PS3 will only play Region 2 (plus region free) DVDs, & Region B (plus region free) Blu-ray Discs (BDs).
Handily, though, quite a few movies have been released on BD with no region coding (even some which are marked on the box as Region A).
e.g. a nice handy list at Movietyme
Where possible, I always buy my BDs online from Movietyme (& sometimes Amazon.com). For ones which haven't been released region free in the US, I normally buy the UK discs from Amazon.co.uk or Sendit.com.
Stay away from the high street when buying Blu-ray Discs... I've seen some utterly ridiculous prices at e.g. HMV etc.
---------- Post added at 20:31 ---------- Previous post was at 20:23 ----------
Oh, & as well as being BD Profile 2.0 compliant, the PS3 also supports 1080p24 (great if you have a compatible 1080p TV which does 24fps). Plus if you're lucky enough to have a fancy 7.1 HD audio set up, the PS3 supports 7.1 Linear PCM, Dolby TrueHD, and DTS-HD Master Audio.