I was going through the Popular Mechanics website when I came across this very interesting article… The article shows in 3 easy steps how to convert your current Playstation 3 into a Linux PC. The steps are that which follow:
Step 1.) Back Up – the first procedure is a no-brainer back up your data as you would before working on any PC.
Step 2.) Upgrade Your Drive – allows you to replace your 40 gb or 80 gb hard drive to a nice 250 GB hard drive.
Step 3.) Install Your New OS – note that the PS3 can’t run Microsoft Windows or Apple’s OS X so that is why you are converting it to a Linux system.

However, the steps do appear much more detailed on the site. The site also mentions that the conversion back to the original PS3 settings is a bit tricky. Get $500 towards a PS3!