You can use RM20 cable, but there is a problem with the PS3 when you use cheap cables as the screen will turn black (no a/v) while the game is running, this is especially annoying in FPS or Racing games.

Also, sometimes, jaggies will pop out of nowhere. Bernard (moh) once used a Rm20 cable in his shop and when I saw the PS3, it looked horrible, there were black lines around everything. This wasn't the TV's fault either, as he was using a 32' Bravia S310 which is used by quite a number of people.

Digital cable quality doesn't have to be really good but it helps.

Isn't the Acer's SRP RM650?

Maybe you said yes at the 'do you want to choose optimal settings' screen.

This automatically switches your PS3 to 1080P which 20' lcds do not support.

If the thing still no picture, off your PS3 and when turning it on, hold down the power button until you hear one beep. Then when the screen comes out, say yes to 'do you want to output audio and video using HDMI' but say no to the optimal settings screen. When you reached XMB, it will look like crap.
Go to the Display Settings and choose Custom, there tick the 720P box.

If it doesn't work, then it probably is monitor problem.