It seems that Medal of Honor require FW 3.42 to play on the PS3. If you deny the update you are thrown back into XMB. But no worries, thanks to mikerock98 a bypass is available, and is quite simple
* ERASE the Update Folder
* DONT CHANGE ANYTHING IN PARAM.SFO
* GAME MUST BE COPIED USING OBM FROM EXTERNAL TO INTERNAL
* HERMES PATCH NEEDS TO BE ENABLED TO PLAY.
Update: It seems that this has been busted as not working, so back to square one.