Installing Linux on a PS3 Fat
The original PS3 consoles have the ability to install Linux through the use of the "Install Other OS" option. In order to use Linux on these consoles, your system software must not be updated to the 3.21 or later update. Insert a disc or USB storage device with a Linux installer onto the PS3. Navigate to the the "System Settings" option on the Xross Media Bar and select the "Install Other OS" option. The PS3 will install Linux automatically.
After Installing System Software 3.21
The release of the System Software 3.21 update disabled the "Other OS" option on the PS3. You are allowed to keep Linux installed on your PS3 system if you choose not to install the 3.21 update, but doing so will limit the functionality of your PS3. Connection to the PlayStation Network, use of Netflix or other Internet-based services and even the ability to play PS3 games released after the 3.21 updated will be disabled if you do not update your PS3 with the 3.21 update.
Mod Chip Installation
Linux may be installed on both PS3 models through the use of a mod chip. Mod chips for the PS3 range in price and functionality, but all of them require that you physically install hardware into your PS3 unit. The PS3 warranty states that it is void if the unit has been modified in any way. Sony also has the ability to ban modified PS3 units from the PlayStation Network.
Software Hacking
Products such as OtherOS++, PS3 Magic and PS3 Break will rewrite the code of your PS3 to allow for the use of Linux and other unsupported uses of the PS3. The PS3 Terms of Service and User Agreement strictly forbid hacking or reverse-engineering any Sony software. Because products that add Linux to the PS3 after the 3.21 update are rewriting Sony programming, these products will void your warranty and can be grounds to have your PS3 denied access to the PlayStation Network.