PS3 Blu Ray player VS Panasonic SC-BTT770 player?

I understand that you are probably not wanting to shell out the money for a real theater, but those home theater in a box solutions are the wrong way to go for many reasons. 1. When the Blu ray player fails you are left with an amp that doesn't have the correct inputs for an aftermarket Blu ray player. 2. The sound quality of a HTIB is far inferior to a good separate component system. Etc. Etc. I could go on for a very long time, but in short the quality is not there. I would keep your PS3 and slowly purchase quality components. Start with a decent receiver (Denon, Marantz, Onkyo, Pioneer) and if you have speakers laying around use those for the time being. When you have the money purchase quality speakers (Lots of great brands out there). You'll be happy you were patient and you will have a much better system.

Hector is correct in the audio issue with the PS3 but it still will output a DTS or Dolby Digital signal just fine. If you do buy the home theater in a box, you wouldn't be able to hear a difference anyway.

You should sell the PS3. Not only will you have the same quality in video, but you will also gain better audio, at least when playing 3d blu ray discs, since the PS3 altough capable of playing and showing 3d video (blu ray 3d), it cannot decode at the same time HD audio (dolby hd or dts master audio) when playing a blu ray 3d.

Hope this helps. Best regards!