Param.sfo is a file containing the game informations for the console.
Like the game name, the GameID, the game version, the minimum firmware version needed (3.56 or 3.60), if the game is a HDD (psn) or a Disc (Bluray) or a DLC game, Parental level, etc.
If you are on 3.55, and the param.sfo of the game you want to play have a higher version needed, the game will ask you to update your console.
To prevent the game to ask about the update, you can either edit the param.sfo manually (there are few Param.sfo editor for Windows), or let the Game Manager do it for you.
Apparently, when the manager is doing it for you, there's something wrong as the video signal is changed and the console freeze.
Maybe you could try it manually :
• Use an FTP server (blackb0x ftp, openftp, dragonftp, etc.) or a file manager (Multiman, Awesome File manager) to copy the dev_hdd0/games/game-ID/param.sfo to your USB and put it on your computer.
Note : If you have the game on your computer, just use the original file, in case the file on your PS3 is corrupted.
• Launch a Param.sfo editor *
• change the minimum version requirement to 3.55
• save the file, and put it back into the PS3
* Param.sfo editors :
• Param SFO editor : I can't load any .sfo file, maybe I need some dependency, like .net or visual basic.
• Homebrewed Playstation3 System file Editor : This one work, but is in beta. Could cause incompatibility. Just try it, it may work fine too.
• System File Utility for PlaystationÂ3 : This one is an offical software from Sony. Can be found in the "PS3 Gui Toolbox" program pack.