A Sony Computer Entertainment representative has confirmed on the EU PlayStation forums that LittleBigPlanet will be region free, saying that “there will only be one region for the game…. a LittleBigRegion.”
“The confusion arose out of regional differences in how moderation will work as there are different legal rules each region have to play by, and at one point this looked like it may require the game to be independent in each region”. So yes, all of your creations will be playable by people in Japan, Europe, North America, and vice-versa. Yay.