I'm not sure how to do it, I synced my PSN with steam but I cant sign into steam to download it, I used my PSN id and password to sign in but it doesnt work. Am I doing it all wrong?  

Have you tried signing into steam with your steam username and password? :)

I dont have one I assumed when I synced my PSN with steam that I had joined steam

Wait, what?  A Free copy of the game?  Where in the heck is this?  All I see is Free 'DLC' for Portal 2.

When you buy the PS3 version of Portal 2 you get the PC version for free.

After you linked your PSN account to your Steam account, you have to sign into Steam and enter the code that came with your PS3 copy into Steam.  There is a menu option under the games menu that says Activate a Game,  or something like that.  

Oh, okay.  That makes more sense.  Might get it for PS3 now.

I finally got it to work, I kept putting my PSN id and PSN password and it never worked so i downloaded and installed steam to my pc and it had an option to sign in with my PSN and it worked.  

Yea i activated mine, just linked through the PS3 then clicked add new game on steam and entered my code.

If you didn't have a steam account before you should have set one up through portal 2 steam overlay then you may have to activate the account through e-mail i'm not to sure then it's the same meathod when your logged in, if your still struggling get in touch with steam support there not the quickest people on the planet but they should get you all sorted out