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There used to be an issue A LONG time ago where the early PS3s didn't properly detect whether they should go into 480p, 720p, or 1080i based on the capabilities of the set and the media you were trying to view (whether it was DVD, BD, or a game). The most common complaint was that native 720p games (Resistance) would automatically go down to 480i or 480p instead of going up to 1080i on older HDTVs (ones bought before ~2005/06 that didn't commonly support 1080p at all, regardless of size).

Do a search for the 1.30 firmware patch for more info. The problem was fixed shortly after launch (I want to say around Christmas of 06).