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I ran into a similar problem when I did it to. You are probabbly using a crossover cable, not an ethernet cable. They look exactly the same. Here is the difference, look at the plugs. If the wires are like this |||X||X||| (doesn't need to be in that order) it's a crossover cable. Wires will crossover each other and look like an X. The cable you need is an Ethernet cable and the wires in the plug will look like |||||||||||. They will all be straight.
Hope this helps.
PSN has nothing to do with it. You have to connect both PS3's with an Ethernet cable by the Ethernet ports to each other. You cannot be signed into PSN.
Edit: Wait, I just realised that you haven't connected both PS3's together. Connect both PS3's together with the Ethernat cable and follow the on screen instructions, or read the manual!
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