If the tv is HD compatible and you have it connected via HDMI from the PS3 then yes it will all be in HD. PS3's don't come with an HDMI cable so you'll need to buy one separately. Don't bother with an expensive one they are pretty much all the same.
The Free view won't be in HD, the DVD's you watch from the ps3 will be upscaled in a slightly better quality. the blurays will be HD. and the games will be HD. don't bother buying old films that are converted to bluray, just buy new releases, i have brought quite a lot of old bluray films and they look the same as the upscaled dvds. so just buy the new films you want in bluray don't go replacing your old dvds
depends what you mean by old films and also it all depends how the film was shot.
Bluray movies can be easily made from older films as they are taken from a source that it technically a higher resolution than bluray is anyway!
take the matrix for instance, the first film, absolutely amazing in HD - 8 years old, black hawk down, again amazing and 6 years old and then Top Gun, 21 years old and stunning picture!
Its got very little to do with the age fo the film, its a lot to do with how the film was originally shot and what it was shot on.