If I set PS3 output to 720p, is HDMI signal still HDCP?

What are you trying to use to record it? And Yes it still has HDCP

You do realize we are talking about Sony? So yes....it's always HDCP over HDMI. The only way to send non-HDCP 720p is over component video (3 analog wires for video only)

I'm using Intensity shuttle to record. I'm buying the component video but now I'm looking for a way to view my preview in fullscreen with audio, even with 3rd party softwares... I really can't find a solution but if I have a computer monitor and not a tv, usually I don't have component connection :\

it should come with a break out cable. Put you componet into that from the ps3 and then hdmi into the tv. Thats what i do and i play on 720p. Looks good too.