Set the PS3 to 16/9 widescreen SD.
Which will give you 4/3 resolution of 720 * 480p or 720 * 576p
Then use Editor software to correct the aspect ratio to ether
640 * 360p 16/9 or Anamorphic corrected 852 * 480p 16/9.
This will give your video full frame on youtube.com