There is a comparison video on YouTube (can't find it now) showing you should set it to limited, and also turn on the ultra bright option while you are there.
They say this then makes the PS3 have the same graphics qualities as the 360, although I still think the PS3 has better graphics anyway. (Don't want to argue about that)
I can't really see the difference in changing the RGB option, but limited sounds better so I just went with it.

The ultra bright obviously makes the whites brighter which you can notice even when looking at the XMB.