Yes, but they don't have to modify the kernel source. Chances are that what they need is drivers for PS3-specific hardware. If implemented as loadable kernel modules, GPLing the code can be avoided. It is the practice used by many embedded Linux vendors.
I think the idea angshuman was talking about was that if the kernel is Linux-based, it'd be part of the numerous open-source licenses, such as the GPL, that Linux is distributed under.
It is not that simple actually. There is a lot of controversy whether a kernel loadable module is a part of the kernel or not, because it "interacts with kernel in a very intimate manner" [Linus Torvalds]. I haven't been following this debate for a couple of years now, so I can't tell what's happening today.
As far as I know, there's nothing "Linux-based" about the closed-source driver that nVidia makes, outside of the fact that it's designed for Linux.
Edited by Diamond, 19 January 2007 - 01:44 AM.