NGP rumored to be "scaled down"

According to multiple reports the NGP will be scaled down. The only problem is that they all cite the same source 01net. The site apparently has gotten rumors correct in the past, but at this point a rumor is only a rumor. The scaled down version of the NGP will cut down on several important features.

• The RAM will be halved to 256MB instead of the official 512MB.
• VRAM will be at128MB.
• The OS is reported to be scaled down but i didn't find how so.
• They did opened up an extra 26MB for data that require quick access.
• Apparently the planned 16GB flash will not be featured but instead they plan to use removable memory cards (SD, Stick Duo) with anti piracy security features.

Sony had said from the start they would offer two versions of the portable, one with 3G and one without it. Could it be that this was the plan from the beginning?  Is Sony going to offer a "cheap-o" version? or is it going to be the norm? For a company that seems to cut back on features of their products it is very possible. The technology exists but its pricey, gamers have been very vocal from the start; they are not likely to buy a portable that's worth $350. Sony might just be making a fatal mistake, this change makes the NGP less competitive. It puts it on a more leveled field with the Nintendo 3DS wich can be fatal for the NGP.