I have hooked up my hd-dvd drive to the ps3 , its a little tricky cause you cant do it before you power on the ps3 , it sees something when you first run yellow dog but it comes up with errors, on the usb connection. Been messing around with linux to try. regardless You wont be able to see anything anyway cause youll need hd media player software, but i'd like to dump the iso to the local hdd just for kicks.
By the way i could not get a regular external dvd rom drive to read either via usb I think its a driver issue the only drivers i find are for DOS. It does read from an external hdd though.
I did have mine on the pc with windvd but it only shoud 520p or soemthing like that.