I have a 60G PS3, and a HD ready Sharp LCD TV, but GT4 never looked really well on it, always shaking a bit, being grainy, rolling text hard to read. Plus the top left image flicker(not a big deal since it's never in the way) and the intro movie. I will try set se if it will work better in 480, with/without PS2 upscaling (I use my Ps3 in 1080i mode, maight not be the best).
On the other hand, I just got my Driving Force GT and set it up to run with GT4 on PS3 yesterday

.. YAY. The thing is that Logitech says that they do not directly support PS2 games on PS3 (because some usb tech stuff), hence it doesn't run right out of the box (the wheel initializes on game startup, but does nothing at all). The trick is to plug it in to usb 2, start the game, press a controler's ps button when asked (the wheel initiates anyway), then stop the controller (long press on the RS button, chose stop controller), then go and switch the wheel usb port from 2 to 1 (fizically, pull it out the plug it in to the other one). The wheel reinitializes, and now it takes the place of controller 1 and it's good to go. Sorry if this isn't the right place for this info, and it was probably known by a lot of people already, but it's sweet and deserves repetition.
Clarification so the info is correct, based on my latest experience: So I tried the above method again, and it didn't work. I was all grrrr and wtf. Then I tried this, which is logical and did work (at least once, as with the above method): In PS3 interface, shut down the DS3 controller, then plug your DFGT into USB port 1. It will initialize and you can use it to navigate the menus. Then just start GT4. The game starts, and the wheel initializes, and since there is no other controller to interfere, it becomes the default one, or something like that. And it works: the buttons in the menus, the wheel and pedals for driving, all ok.