Bugrimmar - I think you have your anger is misplaced. Developers aren't responsible for the lack of upscaling, it's the PS3. Sony decided against including an internal hardware scaler, Microsoft did include a scalar(Ana/Onna?). In this instance, Microsoft made a better design decision than Sony.
This is really unfortunate for people in your situation with TVs that do not support 720p. The games that do support 1080i do so because the developers spend additional time/resources to produce a native 1080i resolution. This expense is most likely picked up by Sony.
Additional reading: http://arstechnica.com/articles/headstart.ars/2
Note, Sony's 1.8 fw added upscaling support of DVDs, PS1, and PS2 games. Therefore, the PS3 will output 1080i for these as well as Blu-ray movies. (I think you need to use HDMI, but I am not sure.) Also, 1.8 included a horizontal scalar that developers can use in games. Unfortunately, universal 1080i support is still lacking. I feel bad for you, but I don't know if Sony is still working on this issue. There are receivers on the market that include hardware scalars that reportedly work well with the PS3, but a new tv would be the cheaper option. +1 for Microsoft on this one.
Thanks for the input, Jeff.
