I am experiencing similar issues. I received the PS3IT-500 today and followed the instructions to set it up with the PS3. I connected the USB adapter to my TiVo Series 3 for power and was able to successfully synch the bluetooth in the PS3IR-500 and my PS3 (1st generation 80GB). I successfully turned ON and OFF the PS3 with my Harmony remote. However, I was unable to issue any other commands through the Harmony remote successfully. The only valid keys appear to be ON & OFF, and the Triangle, Circle, Square, X buttons. I cannot navigate through the XMB at all. Note: I did add the device to my Harmony as "Game Console with DVD > Schmartz > PS3IR-500" and it was recognized successfully.
I attempted to connect the PS3IR-500 to my PC running Windows XP SP3 in order to change the Code Set from the default, but I am unsuccessful since the Utility always freezes whenever I action something. If I start the utility, I receive the error "USB Error - Please connect the drive" so I connect the PS3IR-500 and the utility freezes and I have to hard kill the application. If I leave the PS3IR-500 connected and start the utility, I receive the message "Device Connected"; however, if I hover over any button on the utility interface, the application freezes and I have to hard kill the application again.
I'm out of ideas at this point, please advise what I should do next.