Originally posted by gsrwat
how do I access this setting?
1. With the PS3 turned off, press and keep holding the power button down until the system turns on and then off again. Release the power button when it's turned off completely.
2. Press and hold the power button again. You will hear one single beep when it turns on, then another single beep after 2 seconds, then finally after some more seconds you'll hear 2 (or 3) consecutive beeps. After these, release the power button.
3. Follow the onscreen instructions and you will be in the recovery menu!
Then do what
Stunz said

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Options explained:
Restart System
This option boots your system as normal without changing any settings or files.
Restore Default Settings.
Restores all default settings on the PS3 for networking, clock, video, etc. For a full list of the restored settings you can look under settings> system settings > restore defaults on your console. This should not delete your game saves or other saved content, including your user login.
Restore File System
This will rewrite the files the PS3 uses to boot. This feature will help if files have become corrupted and are not allowing the console to boot as normal. This should not erase any of your saved data or settings.
Rebuild Database
This can be a useful feature if you have lost files on your system for no apparent reason. Try using this feature to see if it can restore those files. This will also rewrite corrupted files within the database, potentially eliminating future issues. This feature should not erase any of your saved data or settings.
RESTORE PS3 SYSTEM
This will restore your system to original including, formatting and erasing all of the data on the HD and returnig all system settings to default. This will not take your system back to a previous Firmware release. Use this option as a last resort, unless you have nothing on the console that you want or you want to erase everything on the console, do not use this option.
System Update
This will allow the user to update their console with new firmware via a Flash drive or other portable media. This will not allow you to update via an internet connection. This can usefull if your system has become corrupted to the point you can not boot. You will need a portable media device with the correct firmware and in the correct file structure to complete the upgrade. For further information on using portable media to upgrade your system please see our section on upgrading your Firmware.