There is a lot of misinformation regarding the option “Enable RGB Full Range” located in the Display Options menu in the PlayStation3.
If you ask in a lot places around the net, the common answer it’s that you should have it enabled no matter what, because everything is darker, the colors are more “vivid” and the image is no longer “washed out”, but this it’s totally wrong. The reality is that you lose all the detail in the shadows or dark places and the colors are over saturated if your HDTV doesn’t support it.
Almost every one of the Hight Definition Televisions in the market are made to work only with RGB Limited Range for legacy support reasons. That means that they only display the range of color from 16 (Black) to 235 (White) instead of the Full Range (0 to 255). On the other hand, most, if not all, of the PC monitors are capable of displaying the Full Range because they are not limited by the Television standards.
The proper way to discover if you should have RGB Full Range enabled or disabled is to take this test image to your PS3; be it using a USB flash drive, downloading it directly from the BROWSER or any other way you want.
Once you have it in the PHOTO menu of your PS3 you should enable the RGB Full Range option located in Settings/Display and see if you can distinguish all the 28 squares of the image.
If you don’t see them at first, you can try to raise the Brightness setting of your TV, but if even then, you can’t see all 28 (it’s ok if you can’t see the first two) squares, you can be certain that your TV doesn’t support RGB Full Range and you MUST set it to Limited.
It’s shouldn’t bother you if your TV only support Limited Range, because they are made with that in mind and the image quality is just as good that way.
Now enjoy your PS3 with the proper image quality without doubts.