This is what the guy had to say on his official site:
Thanks to the tools made by the fail0verflow team (and thanks to sven in particular for his work on the pkg/unpkg tools), the first “Custom Firmware” is now available for the PS3!
Playstation 3 Custom Firmware Installation Guide
You can refer to the guide below to create/install Playstation 3 custom firmware.
Download Playstation 3 utilities and Playstation 3 tools from github/ team fail0verflow:
git clone https://github.com/kakaroto/ps3utils.git
git clone git://git.fail0verflow.com/ps3tools.git
cp pkg unpkg ../ps3utils
Get Playstation 3 encryption/decryption/signing keys from github.
git clone https://github.com/kakaroto/ps3keys.git ~/.ps3
Download Playstation official firmware “3.55” or any official firmware PUP.
Now Extract and copy “PS3UPDAT.PUP” to the “ps3utils” directory.
Create the PS3 Custom Firmware (CFW) from the original/official update (OFW):
./create_cfw.sh PS3UPDAT.PUP CFW.PUP
Copy and rename CFW.PUP to a USB storage device keeping this directory structure in mind:
Connect that USB device to your Playstation 3 and install from Settings -> System Update.
Wohooo! Now your Playstation 3 runs on your own created custom firmware. The custom firmware in question only add little modification that lets you install pkg files directly.
Depending on your situation you may need to install the Custom Firmware PUP from Playstation 3 Recovery Menu. Follow these steps to do that:
Ensure the PS3UPDAT.PUP is in /PS3/UPDATE/ on your USB device.
Power down the PS3.
Press and hold the power button, the system will startup and shutdown again.
Release the power button, then press & hold power again, you’ll hear one beep followed by two consecutive beeps.
Release power then follow the on-screen instructions. You’re now in the recovery menu.
Connect the USB device and select “System Update.”
Note. You can also restore official firmware using the method above.
Where to Download Custom Playstation 3 Firmware
It hasn’t been long ago since Playstation 3 Jailbreak was released. Playstation 3 custom firmware only opens the door for others to investigate other possibilities. You can follow the discussion over at PS3-Hacks for more detailed take on this.