Katilian said:
Pretty much. The 360 hardware isn't powerful enough to do most games at 1080p. Add on to this that the frame buffer isn't large enough to render 1920x1080 with double buffering, so rendering at 1080p would cause flickering. That said, Halo 3 renders 2 frames at 1152x640, the merges them to perform HDR, which shows the system has a decent amount of power. But even then that is still only 3/4 of the pixels in 1080p. Halo 3 says 1080p on the box, so this is definitely proof that games which say they do 1080p can be upscaled.
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I have to stop this person very quickly from the rubbish that they are touting. Nearly all PS3 and 360's games are not native 1080p. There is a select few that are actually native 1080p. Firstly the 360 has an upscaler chip, it is the best console on the market for upscaling pictures to 1080p. (the PS3 has to use software).
I have no problem getting 1080p coming through fine. I really dont understand how you are getting your problem. But on my TV there is a noticeable improvement when in 1080p than 720p. Also the dashboard should definately look awesome in 1080p. I cant really answer your problem, all I can say is mine looks great.