The PS3 games I have look fine on PAL TV sets as well. I tested Super Stardust HD, Resistance: Fall of Man, Motorstorm, Oblivion and the Folklore demo. The text in the Folklore demo and Oblivion was easily readable. I also tested some Blu-Ray movies but on an ordinary PAL TV set there wasn't any noticable difference compared to DVD as far I could tell.
NSTC TVs however offer a lower resolution (480 lines) as compared to PAL TVs (576 lines).