How to get the best video possible using ps3 blu ray and bluray movie and hdmi cable?

The PS3 can automatically detect the highest resolution that your TV is capable of receiving. To use the feature, turn on the PS3 by holding the power button down until it beeps a second time (about 5-10 seconds). The menu will walk you through the steps to auto-detect supported resolutions. That said, even though your TV may accept a 1080p signal, it may still convert it down to a lower resolution that matches the native resolution of the TV (720p for example). Check your TV manual or the internet if you want to find out the native resolution of your TV. If the TV native display is 720p, then giving it 1080p could seem like overkill. The TV would have to downsample the image, which could introduce a delay that is noticed when playing games that require precision timing (Guitar Hero). The image will also become blurred a little by the downsampling, which you may prefer for some video games, because it could reduce the appearance of jagged edges. So if your TV display is natively 1080p, then set the PS3 to 1080p. If the TV is 720p, then either 720p or 1080p will be fine.

The best you can get of a PS3 connection is to connect PS3 via HDMI to TV for video only and PS3 to receiver ( much better if is a 7.1 surround sound system) via Optical cable for digital audio only, both connection must be assigned.

To achieve the best possible audio and video you will need to use the HDMI connection. Set the PS3 to output at 1080p and connect the PS3 up to an up to date receiver that can process LPCM and the newer HD audio codecs. . Easy as that.