There might be a few reasons.

Most likely is that you are playing something (say a DVD or a video file) that is not in HD but in SD, which is only 480p. Try going to the menu of the PS3, it should default to either 720p or 1080p when you are there or playing games.

If that's not the case, go here:

http://manuals.playstation.net/document/en...ideooutput.html

They show you how to set your PS3 to output at a desired resolution.

If it still doesn't solve the problem, check your monitor input settings.

That should work i think