You REALLY REALLY REALLY don't understand how encryption is used do you? Here's a hint. The only think you use PubPriv encryption for is EXCHANGE of a key. You do not encrypt data with a pubpriv crypto system. You encrypt the data with the symmetric key you exchange via the pubpriv key exchange.
Practically, you're correct... but technically, there's nothing keeping you from using public key cryptography as you would a symmetric cryptographic algorithm (secret key algo) -- it's just computationally more expensive.
For that reason, SSL is setup so that the asymmetric algorithm is used to securely pass the session/secret key between two parties. The session/secret key is what's used to provide data security by encrypting/decrypting the actual data payload.
If you want a really secure, but computationally expensive secure channel. You could combine a digital signature key pair with a data encryption key pair -- both can be the same or even different asymmetric algorithms. This way, you not only have data security, but also have some reasonable assurance that the parties you're communicating with are who they say they are. Of course, your digital signature key-pair does need some trusted authorizing body to provide assurance.
How this would work could look as follows:
Harry met Sally, and both decide to securely communicate with their own Digital Signature Algorithm and some Public Key Cryptography algorithm that both agree to (HnSCrypto).
Harry generates 2 pairs of public/private key-pairs. One for his Digital Signature needs, another for data encryption.
Sally generates 2 pairs of public/private key-pairs. Again, one for signing, and one for data encryption/decryption.
Harry publishes both of his public keys to Sally in a manner Sally trusts
Sally publishes both of her public keys to Harry in a manner Harry trusts
Harry writes a love letter, to Sally, signs it with his signing private key (their DSA involves generating a hash of the entire message, and sending that hash value with the private signing key to the HnSCrypto algorithm)
Harry then uses the same HnSCrypto algorithm with his other private key to encrypt both the cleartext message and the messages signature. This result, he sends to Sally.
Sally uses the Harrys messaging public key to decrypt the message received using the HnSCrypto algorithm.
Sarlly then uses Harrys signing public key to verify the digital signature by decrypting the signature, regenerating the hash over the cleartext message, and comparing it.
Sally now can read the cleartext message Harry sent, and knows it really came from him.
Another variant of the above use-case would have Harry and Sally using the other persons public key to encrypt the signed data.
I haven't read through all the above posts -- but I did see something glaringly wrong... but didn't have the time to point it out when I saw it... someone said something about an asymmetric key-pair where (I'll paraphrase): the public component only "works in one direction" and the private component works "both ways"
That really just doesn't make any sense... but it's easy to see why someone who doesn't fully understand cryptographic algorithms can get confused.
With asymmetric cryptography, most people refer to the key-pairs as the "public" and "private" components -- unfortunately, some people still refer to the "private" key as a "secret" key.
The term "secret key encryption" is synonymous with symmetric encryption -- used to describe all algorithms where the same key is used to both encrypt and decrypt data.
Unfortunately, calling the private key used in asymmetric encryption (also known as Public Key Cryptography) the same as the secret key in symmetric algorithms is only valid if you consider that both keys are comprised of bits. That's really the only relationship.
The private key component of an asymmetric key-pair is mathematically related to the public key. They are invalid without each other. That's the security of it. In a secure implementation, it would be very computationally expensive to be able to determine one key if you have the other key. Likewise, if you have data encoded with either the public or the private key, it should be computationally impractical to try and derive the other key. Unfortunately, that is not the case with the PS3.
Hence, this is now used as a "how not to implement a digital signature algorithm" use-case.
BTW, I used to work in the world of cryptographic computing, and it's guys like this:
http://www.gamefaqs.com/boards/960187-/57175136 who made it so much fun. Incidentally, this is one reason I really admire and like the work the failover folks did. For a crypto-geek, it's... just cool.
If you perform a google search for "ps3 cryptanalysis" you'll get other relevant links and more technical information than if you search "ps3 hack"
Again, I find it interesting that the PS3 is mentioned, ignobly in this wiki entry for a "Timeline of cryptography" :
http://en.wikipedia.org/wiki/Timeline_of_cryptography
2010 - The master key for High-bandwidth Digital Content Protection (HDCP) and the private signing key for the Sony PlayStation 3 game console are recovered and published using separate cryptoanalytic attacks. PGP Corp. is acquired by Symantec.