I am not a Photoshop wizard, nor do I know Java, but just thinking about it, PS3 Media Server would have to either:
Option A (What we do manually now with the template but in real time)
1. Already have Photoshop on the PC to open the template
2. Merge, position and scale the movie cover into the template
3. Save the merged file to png or jpg
4. Send to PS3
Option B (Same as Option A but without Photoshop on the PC)
1. Store template as a bitmap on the PC as part of PS3 Media Server Install
2. Convert movie cover (assumed to be a jpg file) to bitmap
3. Merge, position and scale the bitmap movie cover into the bitmap template
4. Save the merged file to png or jpg
5. Send to PS3
1. Create a batch processing tool that uses either Option A or Option B one time (and as needed when new video files are added to your collection)
2. Store the resulting file in the appropriate directory on the PC.
Note: For all options, the source movie cover files would have to have the appropriate file naming convention to match the video file (ie. videofilename.extension.cover.jpg), so they match up when sent to the PS3.
Neither option A or B could be done in real time, so Option C seems the only viable way to go. Perhaps there is another approach that Shagrath has in mind, as the PS3 Media server can generate thumbnails now directly from the video file in "real time". (???)
Frankly, I'd rather just have the capability to generate folder thumbnails because there are many sources on the internet for movie thumbnails/covers that may not be as elaborate as what Bozster has created, but they can be used "as-is". But I also know that folder thumbnail support is dependent on PS3 support...