Space doesn't matter all that much on the PS3. Even with games that require "installation" to run, (like Metal Gear Solid 4) you won't have to worry about it.
And the PS3 supports pretty much every output method. So really, the thing will work with a standard-def TV through a single composite cable. Of course, that will limit the resolution you can get, since the PS3 CAN output to up to 1080p. (though a lot of games will render at 720p and simply stretch it up)
And yeah, the PS3 has an Ethernet jack. earlier on, as I recall, the cheapest version of the PS3 (the 20GB one) didn't even include Wi-Fi to begin with. I believe the Wii is the only console that requires Wi-Fi for networking.
It's worth noting, of course, that using Ethernet rather than Wi-Fi, at least with what adapters the PS3 has built-in, will be both faster and with less lag; Wireless connections always have more lag than wired ones, and the real-world sustained transfer speed difference between the two is larger than their theoretical peaks would suggest; you're FAR more likely to maintain close to 100 mbps with 100-meg Ethernet than you are to maintain 54 mbps with Wi-Fi 802.11g.