Senior Sony executive Phil Harrison said the models were aimed at different types of consumers.
The games giant has been criticised for offering a lower end model without several significant features.
The console is due to go on sale in November, with prices starting at $499 in the US and 499 euros (£341) in Europe.
HD concerns
Sony announced the launch date and price for the PS3 at a big news presentation at its studios in Culver City in Los Angeles.
At the time it only talked about the difference in the size of the hard drives. The basic model has a 20GB drive, while the model costing $599/599 euros comes with a 60GB one.
Only later, after detailed press releases were distributed, did it become apparent that there were other key differences.
The lower end model lacks wi-fi, a slot for memory cards and, in particular, a port to hook up a HDMI lead for high-definition programmes.
The decision to offer a model without HDMI has raised concerns about the high-definition compatibility of the PS3.
Mr Harrison shrugged off these fears, insisting that the both models would offer full HD output.
"What we should be clear about is that the functionality is identical in both machines," he told the BBC News website. "There is no difference in what the machine does."
"It's just that the technical method of extracting audio and video from the devices is slightly different," said Mr Harrison, who heads up Sony Computer Entertainment worldwide studios.
He said the decision to offer two versions was designed to give consumers a choice.
"Some people might be interested in the PS3 primarily and exclusively as a games system, whereas other users might look at it as a multimedia hub in the home, which is games and music and movies and other digital content."
Xbox rivals
Speaking personally, Mr Harrison said he would buy the high end model.
It seems likely that PlayStation fans looking forward to the new system may do the same thing.
When rival Microsoft launched its Xbox 360 console last November, it offered a basic model and a higher-end model. 
But gamers shied away from the cheaper version in favour of the more expensive one.
Microsoft has sold more than three million Xbox 360s worldwide since its debut.
It has set itself a target of 10 million by the time the PS3 appears in stores in an attempt to steal a lead over Sony.
But Mr Harrison said he was not worried by the figures from Microsoft.
"I doubt they will achieve that," he said
"I think the clear advantages of the PS3 will mean that this product is very well accepted in the marketplace.
"We have a great brand and fantastically loyal consumers."
Japanese gamers will be the first to get their hands on the PS3 on 11 November. The console will arrive in the US and Europe on 17 November.
Pressed on whether Sony would meet this deadline, Mr Harrison said the company would not have specified a date unless it could, adding that manufacturing of the console was starting.
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