According to analysis of the most recent PlayStation 3 Software Development Kit, version 1.80 now provides developers with a method of streaming music off the user's hard drive. While this costs 12MB to implement, it's assumed that the cost will decrease in upcoming SDK releases. And while this still takes a good amount of memory, custom soundtrack support is the most wanted feature that led to the In-Game XMB Overlay request.
The SDK also drastically reduces memory usage to 48MB from 52 and video memory usage dropped from 34 to 24. The question does come up. Did Sony give developers this choice too late in the game? They are currently already working on an In-Game XMB overlay that will make use of the music function--so what's the point of this now?
Chances are these bits of information to be taken out in the next update to reduce the usage will primarily be to take this option away from developers when the time for the In-Game XMB Overlay comes.
Source: Innerbits.com

better late then never!!
Yeah mon I'm diggin that, keep lettin me know somethin.
I can see why some people may want it, but I wonder how much of this is "we want it because the 360 does it." I used to have an Xbox (original, not 360), and I never used the feature even in games which supported it. For me personally, it's an unnecessary feature.
PSU
could we have some way off going to the next story and previewing it
psn id: gingo... i think they are too late they should now just have waited until they can get full xmb access then there will be no need for this because xmb access will allow everything
ahhh i can't wait for 2.00
Well, if you are going to pay an EXTRA 100 dollars for a console, it should AT LEAST do everything the cheaper one does. If we can't get a football game to run at 60fps, then we better get custom soundtracks and then some.
i think its necessary i constantly have a stereo going while playing it would be easier to just have the ps3 play it for me then have another appliance going