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I would use a wireless router. Then you can use ps3 or laptop in the house. Or run ethernet from main router/modem to the ps3. You can buy the ethernet cables at amazon.com and newegg.com and they can go a few hundred feet.
In order to have the internet for the ps3 you need to have internet where ever you are. The laptop needs to have a wireless internet box thing or your house needs to have internet. So flat out you need internet
my lil brother has one and he takes it back and forth between his dads and our moms house still works fine. if you have the ps3 hooked up to the internet you can go to the online gide to help you with the psp to ps3 connection.
You can't. For wireless connection on the PS3 you need to have a wireless router hooked up to your modem. Once you have your wireless network hooked up with your PC. You can give your PS3 access and the PS3 will scan for any available wireless networks. Google will help you more if you need more detail on how to set up your PS3 wirelessly.
if you want to be able to play your ps3 downstairs with your modem upstairs, you might consider buying a Wireless Router that has Wireless G , for your PS3. This will allow you to access your Internet all around your house without wires. I suggest looking for one that features MIMO or range plus max, or anything else that increases your signal range since there is a fair amount of distance involved.
The alternative is relocating your modem downstairs and hooking it up to the PS3. BUT your computer wont have Internet.
Dial up is NOT recommended. I honestly do not think it would even work. DSL and broadband work great. If you get DSL or broadband you would need your original ethernet cord and hook up the PS3 from your router. If you go wireless then you would need a wireless router.
I hope this helps. Good luck.