1. find out your computer's ip address on your internal network - network/sharing centre in windows, e.g 192.168.0.2
2. download privoxy from here:
http://sourceforge.net/projects/ijbswa/files/
3. install privoxy, might want to uncheck launch with windows
4. open privoxy, go to options and then edit main config
5. ctrl+f the text for any of the following
listen-address 127.0.0.1:8118
Code:
# Suppose you are running Privoxy on an IPv6-capable machine and
# you want it to listen on the IPv6 address of the loopback device:
#
# listen-address [::1]:8118
#
listen-address 127.0.0.1:8118
#
#
# 4.2. toggle
# ============
#
# Specifies:
#
# Initial state of "toggle" status
6. change both 127 ip's to your pc's address you looked up on step 1 - leave the ports as 8118
7. save and close the text document. leave your pc running and go to the ps3
8. on ps3 go to internet connection settings, carry on as normal until you hit proxy server - choose use proxy
9. the proxy ip should be your computer's ip and the port should be 8118 like it was in the document
10. continue and then do the network test, it should succeed if you did everything right