QUOTE(Chancer @ May 6 2007, 01:58 PM)
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Check your settings then because the 1080 games display at 1080. (The info display even comes up on the TV when the games at 1080 start.)
I also have both systems. The only game I have that is out for the 360 as well is Virtua Tennis. I have only tried the demo for the 360 but it is not as smooth as the PS3 version.
The 360 can upscale all games regardless of programmed display size to 1080i or 720p or 1080p whereas the PS3 displays a 720p game at 720p or 480p, a 1080i game displays as 1080i or 480p, and a 1080p game displays as 1080p or 720p/1080i* or 480p
* this depends on the other display modes encoded into the game.
The 360 scaler does a really really good job of upscaling too. I have played gears on a 47" 1080p LCD through VGA and the picture is frankly stunning. (played it at 720p on a 46" 1366x768 display side by side)
More games will take advantage of 1080p where it benefits the game but for the most part FPS and games with more detailed environments will remain 720p. The benefit of a built in scaler is that scaling is done on the source hardware and the display doesnt need to scale (this can cause more lag and artefacts etc)
The PS3 has no hardware scaler, its possible that a third revision of the hardware will be released with a scaler chip (1st version USA/Japan with PS2 emotion chip etc, 2nd version Europe release no PS2 hardware)