first thing you HAVE to buy a composite cable for your ps3...and plug that into the hauppauge (on the input slot). you will get a normal composite cable with your hauppauge, so that composite cable will go into the hauppauge aswell(on the output slot), and into your tv. you will also get a usb cable (not sure what its called but almost the same of a printer) plug that into hauppauge and into your pc. then after you do all this set your ps3's display settings to composite s-video ( i think fiddle around and find the right one)
BEFORE YOU DO ALL THIS : install the software provided
rep + if this help