Sony will send a PS3 within around 7-10 days id say,
ive seen a few people i know go through this.
Dont know if its different in the US or other places but i know the UK law goes along the lines of
..the product must last a certain amount of time that justifies the price...
So in other words if you paid £400 for a PS3 im damned if its made to only last 12-18 months,they may argue their case and try to charge you but dont let them,even if the warranty has run out,stick to it and youll have your PS3 sorted in a short space of time.
They will not give you a lesser model back by the way,just make sure you stipulate you want the same model back

Getting your disc back seems to be another matter though,dont bet on getting it back.