I don't even remotely have space at the moment for a large TV (even a flatscreen one), also they are still a little expensive (I figure if it's worth doing, it's worth getting a 40" Sony which does 1080p, but that's 1200 quid at the moment).
I really really didn't want to buy a small TV because they are overpriced (compared to higher resolution monitors) and the thing wouldn't be useful to me when I eventually get a proper TV.
Instead I went with the dirt cheap Dell SE198WFP 19" widescreen monitor. It's an inch smaller than the E207WFP I use for my PC, and consequently only supports slightly smaller resolutions (1440x900 being its maximum). However, it does have some features which make it particularly well suited to the PS3.
First off, it supports HDCP (the DRM system being used in the HDtv world), so I should be able to play back protected content without the PS3 refusing to trust me or downscaling it to an annoyingly low resolution.
900 rows of pixels means the maximum resolution falls somewhere between 720p and 1080i/1080p, however, the monitor supports both. This was especially surprising to me as I had expected to be "limited" to 720p (many/most PS3 games at the moment don't go higher than 720p anyway, and it's still a massive leap over standard definition TV). I need to do some more exhaustive comparisons, but I think I will be going with 720p rather than 1080i (it doesn't seem to support 1080p) because it's an uninterlaced mode, so there is absolutely no flickering. Either way the monitor is scaling the image - the question is, which direction is better? scaling 720 rows up to 900, or scaling 1080 rows down to 900. Time will tell (as will this blog!)
For anyone wondering how I managed to connect a monitor which only has DVI and VGA inputs to the PS3 which only has HDMI, component and composite outputs - fear not, HDMI is actually a combination of DVI signals, audio and probably some other gumpf), so it is entirely possible to convert the HDMI output of the PS3 to DVI. That means no analogue signal/conversion at all, so the picture quality is superb and the cables to do it can be obtained easily and cheaply online (don't splash out on a stupidly expensive gold cable, it's a digital signal so cable quality matters a lot less. Just avoid the inexplicably cheap ones on ebay from the far east, they look very dodgy!).
If you're looking to put a PS3 in a bedroom and don't really care for a TV, I would thoroughly recommend this monitor, especially since you'll still have the VGA port free for other things.
I'm sure you won't care, but it also just happens to fit exactly into the only appropriate place for it on my desk!