yep sata, 5 screws to get at it, then insert new drive, replace 5 screws, cover up HDD, turn on PS3, it may ask to format HDD, then your away!
It's SATA.
Personally at the prices currently I'd use an external. Just yesterday I picked up a 160GB 3.5" SATA for £35 whereas a 160GB 2.5" drive would run to double that.