Setting correct resolution:
Use the command ps3videomode -v ## replacing ## with a number related to your resolution.
For people using ps3's on 720p displays (via HDMI), use 11.
Remember that the default sets this as automatic (0)
the options are :
YUV60Hz
480i - 1
480p - 2
720p - 3
1080i - 4
1080p - 5
YUV50Hz
576i - 14
576p - 13
720p - 12
1080i - 11
1080p - 10
RGB60Hz
480i - 33
480p - 34
720p - 35
1080i - 36
1080p - 37
RGB50Hz
576i - 38
576p - 39
720p - 40
1080i - 41
1080p - 42
VESA
WXGA - 11
SXGA - 12
WUXG - 13
Once you've found the resolution that works best on your monitor you can (from either the os itself or bash), open /etc/kboot.conf and change :
linux='/boot/vmlinux-2.6.16 initrd=/boot/initrd.img'
to
linux='/boot/vmlinux-2.6.16 initrd=/boot/initrd.img video=ps3fb:mode:##'
Thank Radiskull for this.