Well, I do have a PS3 and a Sony CDP-X5000 side by side (mind you, second hand CDP-X5000 have been seen going for twice the current going price of PS3), and the comparison is quite interesting.
If you use its analog out, well, it kinda sucked... Analog output of this machine is for those who do not have the budget to pluck down on a DAC, or for those who are waiting for their DAC to be shipped to them.
The digital signal I would say is actually not bad, considering the unit was designed for game and HT, not audiophile purposes.
I compared the two via a custom digital signal processor that reshapes digital signal and then feed it to a KECES DA-131 for the D/A conversion.
The comparison I'd say is that PS3 does sound quite good, especially when compared to a fairly good dedicated redbook CD player. The detailed are a bit muddied, not as transparent, but it is still one heck of a deal for the price paid.
The only problem I have with it is the noise, coupled with my amp's fan (a pair of Ashly FET1500M, lightly modified), it gets annoying when the volume is turned down.
Anyways, I got my PS3 for games and network video player functionality, the network player feature alone already worth more than the purchase price. Add game to it, it is now one heck of a deal, and if we even consider about the performance of redbook/SACD playback, I'd say it is almost worth some anti-trust investigations.
Oh, did I mention that Sony's PS3 does SACD, and can actually down-convert it to a higher bit rate PCM format, then output it via Toslink digital output?
I have not had the chance of trying that, but it seems quite interesting that Sony is letting the digital signal of so called "high definition" audio out of the unit.