Ahhh, so really you have nothing to lose, but something cool to gain? Thats fair. I recently did that with a bunch of broken portable DVD player's. There were all screwed in some way so I just went at them like a loon, got 4 out of 5 working flawlessly
(5th one was used for parts for the others).
Even though I'm sure just plugging in wires for testing 'may' work, if I were you I would invest in a specific connector for the job. That is, find a male connector for your ATX power supply, and one for the motherboard of the PS3. Then wire them up with thick wire, fairly short as an 'adapter'. That way you can check all the connections before actually plugging it all together. Or perhaps removing the 20-pin ATX connector altogether and running the wires in a connector for the PS3 (no doubt its proprietary).
The chanigng LED colour is at least some indication you're getting power to it, although it could indicate a missing voltage, not enough power (dorp in the supply voltage) OR that there is yet another thing wrong with it - beit an existing problem, or one you have just created by powering it up
Good call on the wattage, despite the PS3's 'stripped down PC' design, its so new and powerful I'm guessing its proper power hungry, perhaps even requiring seperate 12V rails.