we got it set up;
ps3 <-->hdmi <-->tv & ps3 <--> optical <-->stereo
i thought this may be copnfusing it, so i took out the optical, no joy

if we turn it all on. the display says 'mode not supported' but then as soon as we chuck on a game, the display comes back. when we try to exit to the ps menu, no joy must be a setting like you suggest. gonna try putting it into a normal tv and change the setting, let ya knopw how we get on