In short, it's smaller, lighter and is ideal for entry level users who don't need a great deal of storage.
It offers the exact same experience as any other PS3s and has a brand new design.
This choice of PS3 is ideal as a Blu-ray player or media streaming device and will set you back around £100 for another device that can do the same, however this can do much much more.
This version has just 12gb of storage, however if your careful with what you use and only regularly play 1-2 games at a time this is the perfect choice for you. If at a later date you change your mind and want more memory, you can buy a PS3 hard drive caddy and install you own hard drive if you would like to. Likewise if your old PS3 is out of warranty and no longer functions you can use your hard drive from your old PS3 in this PS3.
To install a spare hard drive this is the adapter you will need. You need a 5400rpm 2.5" hard drive for it to be suitable for the PS3.
Please bear in mind you will be forced to format a newly installed hard drive and will lose all data you may have had on it.
The build quality it a bit cheaper than previous models which is to be expected and it has no slot CD drive and instead loads from the top although this is no issue.
To sum up, if you play 1 or 2 games at a time or are looking for a blu-ray, media streaming capable device this is for you.
or if your a heavy user, play numerous games at a time, download films/music, use Play TV amongst other things, the 500GB option is for you.