So.... I did everything from scratch and bibbity bobbity boo, wam bam thank you mam, the remote works in XBMC live!
Here are the step by step instructions I took to get this working. I pretty much did this on my machine while typing this up so I shouldnt be missing anything.
Install XBMC live to a harddrive or USB drive.
After you boot into XBMC for the first time just hit "Ctrl+Alt+F1" to get to the first screen's terminal. Log in using the username password you setup when installing XBMC.
Now the first then we are going to do is an update and install all the software we need for this.
Note it will ask for your password again. just re-enter it
sudo apt-get update
this is to use the automated repository downloading command on next line. say "yes" when it asks you are you sure on the download
sudo apt-get install python-software-properties
here you should see some long executing text and then a imported: 1 (RSA: 1) at the end. If this doesnt work you might have to manually add the repository
sudo add-apt-repository ppa:kitlaan/ppa
I do this to refresh the list again
sudo apt-get update
This will install the Bluez packages as well as other packages we will need. Again, say "yes" to the downloads.
sudo apt-get install bluez python-bluez python-dbus
Next we will setup the "uniput" module which is what sends the remote commands into the kernel.
this starts just the uinput module in the current session.
sudo modprobe uinput
sudo nano /etc/modules
when the file opens, add "uinput" (without quotes)at the bottom just after "lp" so the uinput module starts up automatically on reboots from now on. save it by doing ("Ctrl+X" then "Y" and "enter")
At this point bluetooth should be installed and running. you can confirm by doing: "sudo /etc/init.d/bluetooth status". It should say bluetooth is running.
Next let start the pairing process.
This will download kitlaan's pairing script.
will extract it.
tar xvfz ps3pair.tar.gz
This command will being the pairing.
sudo python ps3pair/ps3_pair.py
Just to note normally before I run this I like to start holding down the start+enter keys on the remote for a few seconds before I press enter. If it finds something it will post the address with the name (note sometimes the remote's name at first comes up as [unknown]. If only 1 thing comes up just type 1 and enter. It should register the device followed by a "done".
Now if you press the up button on the remote and nothing happens after like a minute (it should cycle through your commands send so far); try this:
sudo hcitool name xx:xx:xx:xx:xx
where the xx's are your remote's address (you should see it when the pairing script ran, you might want to make a note of the address somewhere). After entering that, pressing the up and down buttons should now work.
Next we will update the bluetooth input file.
sudo nano /etc/bluetooth/input.conf
Here you want to see the remote's config info. what we want to do is replace where it has [11:22:33:44:55] with your remote's address. dont forget to uncomment the line (remote the # just before it) so it runs when the script runs. If you wnat the remote to time out after lets say 30 seconds, uncomment the line just below that says IdleTimeout=30 (note you can change this to anything you want).
For now lets just skip the editing of the buttons. lets make sure everything is working so far.
Before we restart there is one last thing we should add that I need to get it working 100% . We will open the rc.local file add add the hcitool command to this file.
sudo nano /etc/rc.local
In the file go just above the last line ("exit 0"), add the command "sudo hcitool name xx:xx:xx:xx:xx" where again the xx's are your remote's address". save it (Ctrl+X, Y, and enter) and now we should be ready for the restart. You should be able to also go back to the XBMC screen (Ctrl+Alt+F7) and see the remote work.
When you restart XBMC the remote should respond to simple commands like up, down, enter, play, and stop, etc. We will need to customize the input.conf and/or key mappings xml file to fully use all the keys.
I just wanted to add that I noticed that when I run the pairing script the very first think I saw after my command was that "[ xxx.xxxxxxx] hci_cmd_task: hci0 command tx timeout" message which is what I get when I run the hcitool command. I am figuring this error is what I needed to have happen when the bluetooth service starts or I reboot to get the remote to work.
Again I wanted to say thanks to Kitlaan for his code and everyone else that commented in this thread on getting this working in XBMC Live. Now where is my beer!?