Instructions
Turn on the PS3 and TV.
Use the arrow buttons on the PS3 controller to go to the "Settings" icon in the PS3's Home menu. Highlight "System Settings." Press the "X" button on the controller to open the "System Settings" menu.
Highlight and select "Restore Default Settings." According to the PlayStation online user guide, this will "restore the system software to its default settings" for the current user. If multiple user accounts are set up on the PS3, highlight and select "Restore PS3 Systems" instead. According to the PlayStation online user guide, this will delete all of the hard disk content saved on the PS3 in addition to restoring the system software to its default settings for all users.
Follow the on-screen instructions to complete the system restore operation. Do not do anything with the PS3 until the system restore operation is complete.