Sharing Rules
As of 2011, Sony allows North American devices to share one account as long as it's less than five consoles. When you activate the PlayStation Network on a device, it logs the activation with your account settings. If you try to activate more than five consoles, you could be denied and even suffer more serious consequences. In European countries and Australia, only two devices can be activated on one PlayStation Network account, seriously limiting the amount of game sharing possible.
Sharing Purposes
The original purpose of sharing a PlayStation Network account was to allow users to share games that were purchased through the PlayStation Network on several devices. This works especially well for users who have several consoles in their home, allowing games to be downloaded on each device. Unfortunately, some users took advantage of account sharing, which meant lower game sales for Sony. The result has been a crackdown on account sharing as a whole and closer account monitoring overall.
Sharing Risks
The PlayStation Network tracks the amount of times you activate and reactive your account on various consoles. If you're guilt of deactivating consoles only to use the account on another machine, Sony can see the activity and you can be penalized for it. Sharing your account with others against Sony rules could result in permanent banning from the PlayStation Network, which restricts your access to downloads and online game play.
Backlash
The November 2011 decision to restrict account sharing in Europe and Australia was met with heavy backlash, as reported by CNET.com. Some users have complained that restricting account sharing has restricted their ability to share games the same way they could with a disc-based PlayStation game. While as of time of publication Sony does not have plans to restrict account sharing in North America, it's a possibility that could change the way you use your PS3.