Instructions
Turn on the PS3 to access the XMB. If you are currently playing a game or movie, this can also be done by pressing the "PS" button.
Scroll over to the "Settings" option on the XMB. Once here, scroll down to the "Display Settings" and click on that.
Click on the "Video Output Settings." This brings up a list of possible methods by which you are connecting your PS3 to your television. The cord you are currently using will be highlighted. Click on the highlighted cord.
Deselect the resolutions "480p," "720p," "1080i" and "1080p." You will see listed "480p," "720p," "1080i" and "1080p," each with a checkmarked box next to it. Deselect each box from those four types of resolutions.
Leave the "Standard (NTSC)" box checked. You will not be able to uncheck this box, which is fine, being that this is the only resolution you want to have checked.
Set the screen ratio for your television. If you have a widescreen, select "16:9" and if you do not, select the "4:3" option.
Save your settings. Once you save, you will be back to the XMB, which will have a larger display.