Hi there Joe! Are you sure your PS3 is up to a 3 hour sitting? I suppose you can always have a sherry while racing and have another one while it's cooling down. Win win.
Personally I'd use any of the PD fantasy tracks since they always seem to provide the most fun. Trial Mountain or Deep Forest spring to mind since going through the tunnels adds a bit to the excitement. And the car? Well something premium in case they want to use an interior view. I'd use the Mazda MX5 touring car. It's got a great interior view and being a convertible you can see the drivers during the race and in the replays. It's also not too powerful with great road manners (lot's of grip). Start on the RH's and work your way down - it's just fine on CS's. You can always bump it up to a more powerful car later, although I'd stick to a racecar of some sort since it adds to the occasion.
You could also perhaps try the split screen option with someone using a controller.
Have fun!
Edit: You could also try some silly stuff like one of the very fast VGTs (laser powered!) around Route X. Or a custom track with jumps.
Edit 2: Oh and don't forget the karts, especially the shifter. They are great fun when there's a few of you. Autumn Ring or London maybe. There's even that special indoor karting arena.