On the 160gb slim (the first slim), how does one reset the video settings? Before it was just holding down the on button untill you heard three beeps.

It's the same I believe, I did it the other week, it just won't make three beeps anymore.

Reset Video Output

If you are changing cables or cannot see an image on the screen, you may need to reset the video output to default settings. To reset the video output:

1. While the PS3 system is in standby mode (red light on the front of the system), hold down the touch-sensitive On/Off button on the front of the system until the PS3 beeps a second time (approximately 5 seconds), then release it.
2. The PS3 will power up, the Video Output Settings will automatically reset to the standard resolution (or detect the current display output settings of your TV/monitor).

That is from the official US PlayStation website.

That explains how mine randomly keeps going back to 480p with no background. Our 1 year keeps pressing the power button :/ Power buttons with colored lights on them, who ever thought of that never had children.

Yeah just hold down the power button when it's in stand-by.

I'm pretty sure my composite cables are dead. Thanks, guys. 

hold power button down and wait until you hear a double beep. It doesn't always do a double beep so i t may take a couple tries.

This answer was given without reading the OP O_o