Same here....PS3's Bluray's pic & sound quality is excellent.....I remember reading a review last year and it rated as one of the best for just Bluray playback.
As Wrexter said, get yourself the best HDMI cable you can afford....I went for a 2m Keydigital HDMI cable from Frank Prowse Hi-Fi and while not cheap (around $200) remember this is what's transfering the FULL HD audio & picture so is quite possibly the most important cable in the system.
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