I would think that having an OS on a PS3 would be laggy as hell, although it would be cool 
Not really, PSP has a lower spec's, but then again, its not built for like High performace gamming. The specs of a PS3 are below
Cell Processor with 7 SPEs, at 3.2 GHz
512 KB + 256 KB per SPE (7 SPE’s in the PS3)
Custom NVidia Processor called RSX “Reality Synthesizer”, at 550 MHz
256 MB XDR, 256 MB video memory
2 TeraFlops
Wireless, Bluetooth technology, up to wireless 7 controllers - extra controllers via 4 front USB ports
480i, 480p, 720p, 1080i, 1080p, two outputs for two separate displays simultaneously
6 USB 2.0, Ethernet (RJ45), CF Slot (Type I, II), SD Slot (Regular, Compact), Memory Stick (+Duo), Optical Audio
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Its kinda ok. About 3.2Ghz on about 600MB ram estimate.