I am new to this PS3 area. I got a PS3 80GB as a gift last week. I would like to know what all i can do with the PS3. I have a PSP in which i had installed Custom firmware etc. Is this kind possible in PS3?
Your best bet is probably to spend some time reading the boards, but to answer:
Currently the PS3 isn't hacked, so unfortunately there is no way to run unsigned code on it such as Custom Firmware like the PSP has.
There are a few things you can do in Linux (check Linux Forum) and you can run PS2 game back-ups from the PS3 HDD (check PS3 HDD Forum) but that is about it to date... there is no way to play PS3 back-ups yet, etc.