The long-standing rumor about background downloading being XMB-only (and not in-game), has finally been explained. The moment has come for Firmware 1.6 to roll out, and while it's been said that further details about its features will be revealed upon the firmware's release, David Karakker gave a little heads up to Kotaku regarding what background downloading would be like.
Here's the long and short of it:
* You can play games and download simultaneously but...
* only as long as you don't use any other network functionality
What does this mean? You can play games while downloading, but it'd have to be offline. Simple. If you go multiplayer or use any other PlayStation Network function, the download will automatically pause. It will resume (without any lost data) after you're done online.