For those of you lucky enough to own both an HDTV as well as a PS3, you may have been plagued by the upscaling issue that causes titles running natively at 720p to be downscaled to 480p. Recently, Sony has admitted the problem exists, and has stated that a fix is on the way. The problem affects only certain types of older HD displays:
A small number of older High Definition television sets found in the United States only have 1080i inputs for HD signals. Those televisions will currently only play some PS3 titles at 480p resolution. PS3 games render images at either 720p or 1080p for High Definition and you need 720p input on the TV to play select games that do not support 1080p. This is an issue on the side of the individual television sets, which do not accept 720p input, so when a game outputs an HD signal only at 720p, these select TVs have to display the game at 480p instead.
Given that Sony is likely scrambling with their supply issue at the moment, I wouldn't expect the fix anytime soon, but it's good to know they are working on it.