I bought my 60gb PS3 from gamefunk when it was like $350 or less and it's been working fine. I've played through Uncharted, the entire Metal gear solid series (using the PS2 backwards compatibility for the PS2 games), Heavenly Sword, Stranglehold, and logged a bunch of hours in Burnout Paradise, Folkore, Warhawk, DMC4, and Resistance. The only time I had lots of weird issues was playing through Stranglehold, and I think it was just due to really shoddy programming. Midway is notorious for technical bugs.
As for gamefunk, they're a legitimate CAG affiliate and their customer service is great if you do happen to run into any problems in the first 30 days I think it is.