As many have said, both the 360 and ps3's GPUs (specifically fillrate and texelrate) aren't powerful enough to run at 1920x1080 and render all of the latest (And expected) materal pixel shader effects and post processing effects.
Games on PS3 that do run at 1080p (or as close as possible) while maintaining 60hz, lack alot of post processing shaders, use heavily compressed normal/specular maps with generally simple lighting model (so not to show off any visual defects there) and lower the detail. GT5 is a prime example, replay mode runs at 30hz and looks alot better, but in gameplay mode you'll notice that apart from the cars themselfs the rest of the environment is pretty so so looking, if you look hard you can see some low detail textures, textures are only getting a specular lighting materal applied to it (I Can't see any visible normal mapping going on).
While I feel its pretty bad for the HD companies to push the consoles as 1080p HD consoles, it overall doesn't really detract from the game themselfs. The games are still fun, look good, sound great and most games do get to a 720p _native_ resolution.
All n All, if you live and die by a game's graphics, then you really should be gaming on PC.
