The PS3's 3D feature—upgradeable via a software update for every PS3 out there—is actually pretty decent. Not only did we see it live, working, on a giant projection screen, but on a smaller HDTV in front of us.
First up, you still need a 3D-enabled TV to play these games, even though the PS3 supports 3D output.
Killzone 3, the biggest 3D draw for the PS3 in the next year, looked amazing. The bullets, sparks, random debris and enemies all looked different degrees of 3D. The effect was engaging, not off-putting, but also magnifies whatever nausea you experience (if you experience it) with first person shooters.
Driving games were slightly different. If you have a car in front of you, like in Motorstorm, the 3D looked great. If you didn't, more like a first-person driving experience where there was no real frame of reference, the 3D was much less pronounced. But in Motorstorm, it again, added to the experience.
Other games like Super Stardust HD fared quite well with the glasses, but wore down your eyes faster than a standard 2D experience.
The major complaint is the fact that you have to use 3D glasses at all. It's awkward for people glasses-wearers, and tiring to have something heavy on your face during your entire gaming session. Watching a 2-hour movie is already a monumental effort in endurance, but try going at some game for 6+ hours in 3D.
Plus, you also lose the ability for people to spectate, unless they also feel like donning those plastic glasses. Take them off, and looking at the screen is like crossing your eyes, in the fog, while drunk.
But yes, the PS3 can do 3D. It's up to the individual developer to see how they want to implement their 3D and strike a balance between immersion and not being super annoying. Let's hope they get it right.