All PS3 retail games are on Blu-ray discs. This can allow for more content to be placed on the disc, but the quality of the image has nothing to do with the disc - only the content. Most games on Blu-ray won't even come close to filling the disc unless they add a massive amount of CG cutscenes. Some, if not most, blu-ray games probably easily fit on a DVD-9. Lots of games on PS2/XBOX that were on DVD only used about 20-30% of the disc.
The reason movies look and sound so much better on HD-DVD and Blu-ray is the fact that they don't have to be compressed as much, they are mastered at a higher resolution, and the audio is usually offered 100% uncompressed. You could put an HD signal on a DVD if you had a DVD player that could output the signal, but you would not be able to fit an entire movie on the disc at the higher resolution. Basically HD-DVD and Blu-ray are just storage media.