PS3/Sharp 60" LCD TV....

Turn on game mode.

Game mode frees up the processing power that normally goes into something else, thus taking away the lag.

Sharp TVs, the LE700UN for example, will have an input lag of 50-80ms but with game mode on, it drops to 5ms which is significant and comparable to panasonic plasmas (on any mode).

The downside of this is the image quality.

Try describing what you're noticing in a bit more detail. You really shouldn't notice much lag, even without game mode enabled. Even 50-100ms is generally imperceptible in most gaming situations.

You say it feels like it's "over compensating." I'm not sure what you mean. The PS3 has no idea how much display lag is happening, so there's no way it would be compensating. Is this a speed issue? Peculiar to a specific game?

Have you tried using a different controller? My guess is your controller is going bad.

^^^Yup. What you're describing sounds like your analog stick is dead. That extra movement happens from a combination of two things working together:

1) A game (like an FPS) that has a very small and very sensitive dead zone (the "neutral" position of the controller).

2) A stick has started to go bad.

You can diminish the effect a little by decreasing the sensitivity in the game settings. But it won't be a perfect fix, and it'll only get worse over time. Eventually, you'll start to notice movement happening on its own, or you'll notice the camera move a little further or faster than you wanted it to move. The only real fix is to get a new controller.

Most other game genres aren't as sensitive to sticks that are starting to die, but FPS games are much more sensitive to the slightest movement, so you'll know right away when a controller is starting to go bad.

Usually the sharps have the lowest refresh rate there is. I also have been looking at a 60" aquos to replace my 52". I would suspect its not the TV

wow it looks like quaint is the only one that has some idea of what's going on here, the guy is talking about the infamous "input lag" 120hz and 240hz are tainted by, the extra processing is what causes this, lets say you press the jump button on your controller, there will be a delay from when you press the button and when the animation begins on the screen, unfortunatly there is no cure for this desease, only "game mode" can attempt to help but at a loss of video quality and clarity, basically putting the tv at 60hz, rather than the aritifical 120hz, but yet you will still have this "input lag", but to help out the original poster, there's really nothing you can do, I have been debating whether to even purchase a new 240hz because of this issue, or atleast until tv manufacturers address this issue

Defintely sounds like input lag. Very common on many new flat panels, especially those with advanced post-processing and motion smoothing.

For me (Sony Z), game mode works fine. This does NOT change the native frame rate - it will still run at 120/240hz, but the processing will be reduced, which minimizes the lag you are experiencing. Some tv's will have reduced picture adjustments in game mode, but that's a reasonable sacrifice when playing fast moving games.

I don't think that's what the OP is talking about. He mentioned "overcompensation," which as he described it is a classic sign of a dead/dying analog stick.

...which isn't to say there isn't also input lag happening.

he shouldn't be experiencing input lag on that panel, I have the same one and it's 10ms tops...best LCD I could find for gaming by far

I have the same tv and same problem. It's input lag. The controller is not the problem. Nothing is overcompensating. If this were true, it wouldn't do it when pressing any other of the buttons but it does. Game mode is not available on my tv so just play around with the settings. You can also turn 120hz off completely.

See to get a pretty picture with no jaggies etc. the TV will store a couple frames... and then analyze the differences from the frames.. and interpolate new ones.

And all that scanning and guessing and interpolating takes time.

Game mode basically ditches all of that. So the picture is pushed to the screen as fast as possible with no delays to be "analyzed."

Another related issue is audio lag. That happens when a AVR or sound bar takes time to decode the audio and does some cleaning up of the signal applying effects and filters, and by the time the audio gets spit out, its delayed compared to the video.

I just got a 60" lcd sharp aquose and I play call of Duty to get rid of the lag I bought a 14.7hz hdmi cable I set my ps3 to 720p only.and I turned off all extra smoothing and processing options exept for 120hz I put it on low.I can't say there is no lag but it eliminated most of the lag.