So can anybody explain how to configure my PS3 for NAT2 as this seems to be the one everybody is using for online. I am hard wired from my modem to my PS3.
By all definitions I have ever seen, and the way people use them in connection with a PS3, NAT1 is normally defined as direct connection to the internet, thus it isn't really Network Address Translation at all (though this may depend on the service you use). NAT2 refers to connecting a router between your modem and your network capable devices. The router uses a pool of different addresses and performs the Network Address Translation to allow all of your internal devices to get out to the internet through 1 address assigned to you by your ISP. I guess that the 1 and 2 mean single hop vs double hop to get out.
Step 1: Buy a router. This can be wired or wireless, but wireless will have greater future utility and will have extra ports on the back for hard wired connections anyway. Configure the router so that it connects to the internet through the existing modem. How you do this will depend on the router and the type of service you have - the manuals for these devices are usually pretty good. The router will be pre-configured to use DHCP. If you want to use the existing range of IP address (normally the 192.168.1.x range), that is OK, but I usually change the range to some other private range (maybe the 10.10.10.x or 172.16.1.x range). Keep note of the IP address range used by the DHCP pool.
Step 2: Plug the router into the modem using an ethernet cable.
Step 3: Verify that the router is working by plugging a computer into it and making sure you can get onto the internet. Or if using the WiFi, then connect and test that way.
Step 4: Run a cable from one of the spare ethernet ports on the back of the router to the PS3
Step 5: Turn on the PS3 - go to settings or something (my PS3 is currently 10000 km away so I can't refer to it). Make sure the PS3 is using DHCP. It should connect and you should be away to the races, so to say.