I've seen more than a few threads here and elsewhere about the "washed out" look of PS3's graphics.
Admittedly, while playing through Assassin's Creed, I couldn't help but notice a certain flatness in the overall color palette (despite the spectacular visuals and animations) ... but in most cases, and in most games, it hasn't really phased me to the point of taking anything away from the experience.
I stumbled across this link on the Official Playstation Blog :
And when I attempted the setting manipulations, I was thrilled to find that they did improve the richness of the overall color output.
I can verify via quick tests of games like Heavenly Sword, Uncharted, Warhawk, Assassin's Creed, and Motorstorm, after changing the settings they looked even better on my 1080p HDMI setup then they had previously, especially Assassin's Creed.
I'm not sure if this change is limited to those utilizing HDMI setups, but it's worth looking into and trying if you have a PS3.
There are some notes from users on that site regarding "crushing blacks/shadows" by changing RGB to full ... but I've not personally noticed any loss of detail in the black areas of games, etc.
I'm not an HDTV tech, so I can't provide too much information other than what I've seen on mine (Panasonic 52 Inch 1080 LCD) but I can absolutely attest to an improvement in the richness of color, so, I guess it's a test and see for everybody.