No. You can't play PC games on your PS3 by utilizing it as your Graphic Card. I don't think MSN is supported in PS3, however there's a chat function in PSN. (PlayStation Network)
Act as wireless modem? Nope, however it has built in WiFi and a ethernet lan slot.
PS3 is can play those Blu-Rays, DVDs and CDs.. It could spoil the lens by excessive playing of pirate DVDs/BluRays/CDs is being played of.. The lens can be die in anytime too if it tends to be overheated (YLOD).
PS3 doesn't support dual screen display.
The RAM on the PS3 is firmly soldered onto the main PCB. Plus, there's no one has upgrade their rams before. (Or if anyone does?)
Anything is possible to overclock, but then PS3 is not possible to overclock a.t.m, somehow it could be overclock in future, who knows?
Using a USB Keyboard and mouse is possible on PS3, but not for gaming. Unless you're talking about gaming mouse specially for PS3 like FragFX, Fragnstein, etc.
You don't have to mind it it's illegal or not, because mod will take care of them. So no illegal talks in this forum, like piracy games etc.
Online gaming is not all about download and upload speed, the ping plays an important roles too when comes to online gaming..
Changing router or modem will not solve your problem if u're having high ping on your line

Check your ping @ www.pingtest.net
okay... so ps3 is more of an media device.... a few mre questions... can i still use the ps3 while its connected to my pc??? lets say i plug the hdmi port to another screen while its usb to my pc....?
is there anyway to chat with other people? like facebook or msn for ps lol.....skype maybe?
for the games say i d2d to my ps3 from internet.... if the hard drive suddenly fries or i changed it.. can i still download it again to my new hard drive or do i have to buy the game all over again?