I am getting my PS3 seviced and I don't understand this step.
You have 3 options:
1. If your PS3 is still operational, under "Account Management", then "System Activation", you will find the option to deactivate your console.
2. Follow these instructions. This way will only deactivate your console for games, so if you've ever downloaded a movie/TV show from the store, this way won't get the job done:
3. Call them and ask for your console to be deactivated
If your PS3 doesn't work, then your best bet is to call Sony, as they can deactivate everything.