Well, I figured out how to make it work if anyone else is interested:
What you will need:
1. HDMI switcher box (optional if you have 2+ hdmi inputs on your monitor)
2. 2 HDMI cables (3 cables if you are using the switcher box)
3. 3.5mm Stereo Plug to 2 RCA Jack Splitter Adaptor
4. 3.5mm Stereo Extender cable (depends on how close your PS3 is to your PC .. recommended anyways)
5. PlayStation AV Multi Cable (should come with your PS3)
All those parts are fairly cheap.
Steps:
1. Plug the AV Multi Cable into the PS3 then connect the two audio RCA's (red and white) to the adapter
2. Connect the 3.5mm extender into the other end of the adapter. Connect the end of the extender cable into your
LINE-IN port on your PC. The sound should be good now.
3. Hook up your HDMI's to your monitor or your switchbox
4. You should be all ready to go. You will be able to easily switch between PS3 and PC (automatic if you have a switch). You should be able to hear your PS3 and PC sounds for steam notifications and Teamspeak (and adjust the line-in volume via your PC. And you can use your headphones connected to your PC. All for pretty cheap (use monoprice.com for cheap prices).
I hope this will help somebody :P
EDIT:
I try to help and this is what I get LOL
