The E-Setter is a device for people who can easily set up the screen on their TV. Some people may have 2 or more TVs at home: when they want to move the PS3 to play on another TV, they may find it has no picture on another TV.
It is because the output resolution is different on each TV so they can't get the picture, and they have to set the PS3 back to original setting on their current TV before moving to another TV.
Apart from that setting the output of PS3 is so complicated.. almost takes half an hour to do so. The E-Setter is a device for you to set up the output resolution easily, people just need to switch a button and get their set up within a few seconds only.
In related news, today GunPR has shared MegaBox PS3 WIP. It can be installed via Petitboot Bootloader (OS Selector) For PS3, but remember it's only a WIP thus far and lacks HDMI output.
More to come on this soon, and some concept pics are below!