The Senior Producer for Motorstorm has posted on the official PlayStation blog to explain why PS3 owners are still waiting for the 1.2 patch.
"... right before we were planning to go live with the 1.2 updates with Time Attack mode, a new issue was found on the patch that could result in people not being able to establish a network connection. So, unfortunately, for now we need to continue to run tests and monitor the fix to ensure that it does not occur when the patch goes live.
I play Motorstorm religiously and *love* the new Time Attack mode, and I think you will too. Of course, it's in the best interest for everyone that we resolve this before we release the update. Bear with us, we'll have it out as quickly as we can and ensure the bug doesn't cause any problems for future updates."