Well first off you shouldn't be connecting your PS3 to your receiver using composite (red/white/yellow) cables if you want to make use of HD video and sound support. Your receiver can accept HDMI inputs, so connect your PS3 to your receiver via HDMI and then keep using your HDMI cable between your TV and receiver. The way you have it set up right now, your PS3 is sending a 480i/p signal to your receiver which then needs to be upconverted by either the receiver or TV to an HD format, thus you lose picture quality.
As for the speaker crackling sounds...see if the switch to HDMI makes a difference and re-run the PS3 audio auto set-up again. Then just double check the rest of the audio settings on the PS3 XMB menu.
I hhave recently purchased a PS3. I also have a HK354 receiver. I decided to connect the PS3 to my HK354 receiver via component cables (ie red yellow white). I then connect to my receiver to the t.v via HDMI cable. After about an hour of playing the game I start to hear crackling noises through my speakers in the surround sound. Please tell me what to do to rectify this situation.