I know PS3 games are region-free. But how about the online gaming? Are there any regional limitations? I mean while playing online, on NTSC device, can PAL games work properly on my region(Europe)?

It really doesn't matter, but game content is region-based. So if you purchased a game from US but live in Europe, you would need to get US DLC as European DLC won't work with a US game. So in that regard, yes, certain content is region-based, you have to make sure you use the same region content as the game itself.

PAL and NTSC are Standard Definition video formats. They have nothing to do with online play.

No there are no limitations unless the game developer chooses to make separate servers for different global regions. For the most part PSN puts you with gamers around the world. Kinda the point of having an online network, after all.