If nobody has explained it yet, I will.
The central issue here is that Sony decided to remove the abillity to run any OS you wanted (like Linux) on your playstation console, a feature which a lot of people used and paid for. Sony did this claiming it was for security reasons and to stop hackers, when in reality it was because they felt it could be used to circumvent a lot of game protection and allow people to more easily play pirated games, and thus by doing it, they felt they could save a few bucks. When this outraged people, Sony basically pulled the whole TOS/EULA arguement, claiming that nobody actually owned their consoles, and pointed to their legal department which outraged users weren't going to be able to fight, despite several possible avenues of attack on the issue (which I won't get into).
Geohotz is a guy whose big claim to fame is that he found a way to restore the other OS functionality to the PS-3, so those who say wanted to run Linux, could choose to do so. He shared this information, and Sony pretty much blew a gasket that there was actually opposition to them stealing features from customers who paid for them.
As Sony was making noise with Geohotz, hacker groups like Anonymous got involved and pretty much said "this is wrong, if your going to do it, we're going to make you pay". Since Sony claimed that the removal of the other OS option was for security purposes, the attack not only took them down, but outed them as liars due to the simple fact that Sony really didn't have any security of note in place. Our information was always this vulnerable, you can't plug a leak when the whole system is a leak.
Like it or not, the only thing businesses care about is money, and the only way to cost them money and hurt them for things like this is through the customers. While it seems like the hackers have freaked people out, by all accounts we haven't actually seen this data has been used for anything on the scale it could have been. The rate of actual violations of data targeted by this attack seem to roughly coorespond with what would have happened anyway with the other services people are using. There are actually jokes about how your information is probably safer with Anonymous than with Sony.
At any rate, I hope this explains the issue fairly well.
Me, personally, I think it's a giant mess. I've always had mixed opinions about Anonymous, opposing them on things like defending Wikileaks, on the other hand I think Sony was so dead wrong here that I just can't bring myself to defend them. Sony pulled the whole "evil corperation with even more evil lawyers" thing in exploiting it's customers and got called on it for once.
Truthfully, one of the things that makes this whole situation interesting is that Sony could probably deal with a lot of it by just apologizing, and admitting it was wrong about the OS thing, and agreeing to not try and pull anything like that again. Of course being a huge, and incredibly arrogant, corperation it's not willing to do that.
I might sound like a favor the hackers, but really it strikes me as being a situation with a bunch of jerks on both sides in the final equasion, however given that Sony did something really wrong here, and the problem largely continues due to Sony not admitting that, I typically wind up viewing them as being more wrong if that makes sense. I mean we all knew Anonymous were a group of criminal jerks, and they both admit and relish in that role, Sony at least makes pretensions of being legitimate and yet sure wasn't acting like it.
I'm annoying about the PSN features not all being back yet myself, but when I look at Sony taking things away that I paid for, even if I didn't use them, it makes me pretty bloody angry.
If Sony relents on the issue, apologizes publically, and agrees to never do anything like this again, and the attacks continue I'll be on their side. Right now it's like a group of gang bangers and the mafia going at it.... from my perspective everyone involved is a scumbag, and I want to just be left alone. Pretty much I want everyone to just knock it off, Sony to give me back the OS option if I ever want it, and the hackers to stop messing with the online service I want to use.
It's hard to take a side, when there are no good guys, and it's all more a matter of "whose wrong the least".