My nephew has a similar setup but he records from an Xbox 360. I don't know the answer to your question at the moment but as I am setting up my old PC for him to do this, its a problem I have to cover on Wednesday. I have not heard him speak of any problem and I know that his screen grabs with his dazzle are fairly high resolution.
Without trying it, the issue is can a PS3 display an HDMI image whilst sending the low resolution image via RCA to the Dazzle? I think that on some satellite boxes etc they allways send a picture from the scart socket and the HDMI port.
I take it you have tried connecting both cables at the same time? and checked to see if there is an output from the rca sockets?
Shrimpy



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