Actually, I’d bet that prices are going to drop again this spring. My guess would be around E3, which is IIRC in May.
Thanks for all the advice.
I think I’ll go with waiting until spring and seeing if there is a price drop in the PS2, and if not, then get it anyway.
I’ve noticed there are good deals on PS2 games in the used game shops which are popping up all over.
The reason it’s compatible is that the PS2’s GPU actually emulates PSOne/PSX games. This emulation is what gives the PS2 the ability to execute such features as texture smoothing on PSX games, for example.
What would really impress me is if the PS3 would be compatible with both PS2 and PSX games! 
The lack of dialup support is no small issue. Only about 17 percent of Internet users in the U.S. have broadband access.
And, more subjectively, the reviews I’ve read haven’t been as clear-cut as you suggest. The XBox service is more integrated–you have the same username in every game, you can check your rank against other users, and you can receive alerts inside a game. But casual online gamers who don’t subscribe to games like EverQuest can save a lot of money in the long run with the PS2.
Don’t wait…buy now. If prices are going to drop they are not going to drop much if new systems are not due until 2005. In 2005 you will be able to get a PS2 for about $50.00 (like the PS1 is now), but you will be saying to your self “I wonder when the PS3 price will drop”. They are pretty much like computers…you gotta just get the best deal that day…in the long run you have to look at the fun it gives you not the $XX.XX you saved.