Well i don't have a PS3 so i have to guess.
Check if there are any settings that you need to adjust.
Have you tried just using an HDMI cable by itself? Your PS3 should automatically detect the type of cable. By using both the AV and HDMI cable together it is defaulting to the lowest video setting ... AV.
You should be able to select the televisions HDMI input using your remote although it may not show up without an HDMI connected device being turned on. That's how my Samsung tv is. My PS3 has to be powered on before I can choose the matching HDMI input on the television.
No, you don't need another HDMI cable. It doesn't matter if you have a $10 generic cable or a $100 Monster cable. In 99.9% of cases one is going to work as well as the other because it carries a digital signal. Unlike analog it's either going to work perfectly or not at all.
In response to the poster who said you first have to set your PS3 up using the standard AV cable that is completely wrong. My PS3s original AV cable is still untouched and sealed in its original packaging.
You have to change the video settings on your PS3 to use HDMI. Plug in the scart cable to go into the video settings. Once you change it so that HDMI is your selected cable method, just plug the HDMI in.
These are quotes from Yahoo Answers.