So you've bought this new PS3 game, inserted the disc, started it up from the menu, and "what's that!", the game only fills about half of the screen, only the center is the actual game, with black bars around all four sides of the game, the game is not fullscreen, like a demo!
Well, as it seems the game is in 720p and not properly set to fill the screen - either by your TV set or the console.
Have a look at the back of the game's disc case, there should be an info box indicating what resolution the game supports or is design in, usually, with the above problem, it's in 720p.
Now, there are two ways to resolve the "game not filling the screen" problem:
1. Check the scaling settings of your TV. Go to settings and make sure your TV is not set to a "fixed aspect ratio"-like setting, not to something like "always display in 1080p or 1080i", something like that. Because, when the game is in 720p, the PS3 will output this resolution natively over HDMI, without any upscaling, and your TV, Philips Full-HD TVs for example, will display this like a zoomed-out small screen embedded into a 1080 picture. So make sure your TV is allowed to scale up these smaller-sized contents, by properly auto-detecting the smaller picture format, and then adjusting /switching into a compatibility mode (up-scaling mode)
2. Alternatively, adjust the Video-Settings of your PS3 to do the up-scaling for the TV. Go to Settings > Video-Settings and select Manual Settings, a menu will ask you which resolution your TV supports - usually, all resolutions are checked (as the PS3 assumes a modern TV would auto-adjust to what it is fed with - but when you are reading this - your TV obviously doesn't). So Remove the checks on all resolutions that your TV doesn't support. When you are experiencing scaled-down game screens, this means your TV is Full-HD and supports only 1080 like resolutios, so remove the checks on 576 and 720 resolutions. After that, the PS3 will scale up the 70 game content to 1080 resolution.
One note is that I experienced that the scale-up doesn't do well with aspect ratio and for example a Rockstar game I tested this with showed vertical sctretching, although the game more or less filled the screen. So I prefer the solution offered in 1.
Another note is that the Settings > PS Upscaling settings have nothing to do with this! These settings only refer to PS1 PS2 games, and how the PS3 emulates these.
ps3 games not fullscreen
PS3 games aren't playing fullscreen
ps3 video settings games black bars around game