If you buy the PS3 Blu-Ray remote (which is around $20), the PS3 will work just like a Blu-Ray player and you don't need to play with game controllers if that was your concern.
EDIT: I note that you can load other operating systems onto the PS3. Does anyone know if someone has made a "Blu-Ray" player OS for people that want the game-playing functionality to go away?
Also, there is an IR-Bluetooth unit that will add full PS3 control functions to a universal remote. Unfortunately it's about $100.
As far as the operating system goes, I think the PS3 OS is quite decent. It's nice how things are organized into music, pics, vids, and games, and I don't think people would have trouble navigating around to play their movies. You could just leave autoplay on and it'll act like a DVD player...