Virtual memory is considered a no-go on console boxes. Console devs like knowing that if they ask for a piece of memory, they will get it in a very predictable way. If you ask for some ram and hit a page fault, you got yourself a stutter right there.
PS3 has a built in hard drive, and I suspect it has no virtual memory.
Having standardised internal flash memory would solve that. 16GB has been thrown around. Even at 150-200MB/s that's pretty good (I'm not sure what such small quantities can achieve).