Updates: After testing, the whole 32 install bubbles are the max number allowed is bunk. I have 33 on my XMB right now. However another side effect of this has been found. It seems that Minis and PSone titles will no longer be installed automatically when you choose to auto-shutdown after background downloads complete. They will not install automatically after downloading without the use of background downloading either. Simply put, all Minis and PSone titles must now be manually installed.
It also seems that PSP only content can no longer be installed at all, it will just remain as an install bubble. So if you liked to store all your digital PSP games on your PS3 in a nice folder you are out of luck.
I really hate it when stuff like this happens. It seems that with the latest PS3 firmware the option to copy installed titles which have PSP playback ability has been removed. Instead you are forced to redownload all of these titles that you wish to put on the PSP and copy them over before they are installed.
Minis titles which are redownloaded can still be installed and played on the PS3, but it leaves the install bubble at the top of your XMB game list. This is so you can put the game on the PSP after it has been installed to the PS3 at some point.
A user on NeoGAF noted that you can only have 32 pending installs on the PS3. So if you have that many it would halt the ability for you to download in the background.
What are your thoughts on this? As someone who plays a bunch of minis, this is a pain in my ass.