Check Sony site you can upgrade your PS3 to version 2.20 released March 25, 2008. Blu Ray is very secure and the PS3 was a very,very good choice. I had a pS3 ,but lost in to the media room as a game machine so I got a Panaosonic DMP-BD30.
Also, haven't tried optical, but there is a significant difference by connecting via HDMI as opposed to component.
Go HDMI if at all possible on 1080 or auto ( some games will only run 720P).
Cheers