Sony has announced that a demo of the PS3 version of Modnation Racers is now available to download from the PlayStation Store. The 1001MB file is available in both North America and Europe ahead of the game’s release this week.

The full PSP version of the game is also available to download and carries a surprisingly low price. Those in the UK can purchase it for just £16.99 – a full £8.00 cheaper than the asking price for the UMD version at GAME.

It’s not all good news though, as Sony is clearly looking to capitalise on used game sales. A download named “Online Entitlement” is also available, with instructions to “download only if the in-pack Online Entitlement Voucher is missing, or is no longer valid from your retail copy.” It goes for £7.99.

‘Heads-Up’ PlayStation Store Update (19th May 2010) [PlayStation.Blog EU]

Aside from the two Gran Turismo announcements, Sony also revealed one further racing title at E3. Modnation Racers is a cartoon-style kart racer with impressive track editing tools and online multiplayer modes.

The game is being promoted alongside Sony’s platform game LittleBigPlanet and it bears many similarities to that title. Players can create their own character and skin their own vehicles, but most significantly they can create their own tracks and share them online with others. The demonstration given on stage was particularly impressive – the team created an alpine figure of 8 circuit complete wtih a variety of trackside objects and environmental features in a little over five minutes. The landscaping tools are reminiscent of those in SimCity with the ability to raise and lower water and land positions.

There are a variety of racing options, including single player, two player split screen and online multiplayer for up to 10 people. The game is scheduled for release on disc (not PlayStation Network) in 2010. The first screenshots and the E3 gameplay demonstration appear below: