"Internet radio now works on the PS3. First playback attempt is likely to fail with an “Access to the media server has been denied” message (or “unsupported data” message), this is because the PS3 does not wait long enough for the data to be fetched over the Internet. After this failure, wait a few seconds and try playing this same station again. Assuming a connection to that station was possible, there won’t be an error message, however the actual playback may take up to two minutes and more to start since the PS3 requires about 1 MB of data before it initiates playback."
Try downloading the new version with integrated PS3 functionality (as opposed to the patch they released a few days ago) Here's one of the notable changes: