PS3 allows several options but the video quality depends on what you are using.
Most basic type of video connection and with lowest quality. This is what you get with Dany device
Uses only single cable identified by Yellow Connector
Component Connection (Sometimes referred to as Progressive Video by DVD Players):
Uses 3 cables for video signals. Provides Better quality than Composite. Cable connectors are Blue, Red, Green.
TV should support Component Connections.
Special connector with 4 pins in it. Video Quality is similar to component.
HDMI (with HDCP protection):
Best video quality. Can only be used with display devices with HDMI input like LCD/Plasma TV. Some LCD monitors have started coming with HDMI input as well. HDMI to DVI cables can be used for connecting standard LCD monitors but the monitor should support HDCP encryption otherwise it will not work
Standard desktop speakers will do but you will miss the 3-D effect.
VGA box recommended may or may not provide desired results. PS3 was designed for HiDef and HiDef display device is a must to fully enjoy the graphics power of PS3.
Hope this helps