Yes.. I think you're right... but I don't have DVI.. only NONE and the component.. which would normally lead me to think I shouldn't be able to use DVI until I got some kind of firmware upgrade or something (I got my 7-40 in march 2006)..
However.. it did work with xbox 360, so I suspect that the old firmware or whatever had NONE mean "don't use component -> use DVI" or something.. also, I can see that it does indeed switch to the pure digital display (although it's just grey).. you can see this since the picture is pixel perfect, no noise, and if you do Menu to get the brightness / contrast / color menu you can see that the tekst is crystal sharp..
So my theory was that either PS3 defaults to a HDMI res that BV doesn't support.. or the cable is broken.. or something on the PS3 is set up wrong...
I guess I should try a normal PC/laptop to try to eliminate what might be the problem..
Appreciate any ideas :)