For the record. I have my 47" Westinghouse connected to the PS3 using a HDMI-DVI cable, connecting it to the DVI-2 slot and it works great with 1080p.
I tried component, but I was getting major ghosting when I turned on any resolution with progressive. I am not sure if this was the cable or my particular PS3 or what, but it was pretty bad.
The HDMI-HDMI connection had the infinite looping problem others have described, where the tv cycles on and off, trying to find sync. Unplugging the HDMI cable and plugging it back in worked, but only some of the time. Sometimes I had to keep unplugging it and plugging it back in several times before it would re-sync properly.
The strange thing was when I connected the HDMI-DVI cable. At first there were sparkles and even lines of only red, green, or blue lines. I was really worried at that point. However, after going away from the tv for 30 seconds and coming back, everything worked great on 1080p with no sparkles or lines and no ghosting at all. I don't know why letting it sit on for a while would have helped, but it fixed it. I only noticed the same problem the next time I turned on the PS3 but for only 5 seconds, then it stopped. Since then I haven't seen it at all.
PS. - When using the optical out, make sure the settings in the PS3 BD menu say bitstream for 5.1 surround to work. After changing that setting, turn the PS3 off and on and it should work.