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There are various reasons why a game isn't rendered in FullHD rather than upscaling the vertical resolution, which isn't really caused by genuine hardware limitations or anything of this sort, for example the early game engine was developed for another platform like for example on a PC. We know this is the case with regard to Super Stardust HD (although its legacy game engine has been greatly modified). But Super Stardust HD does show alot of added detail compared to running in downscaled at 720p.

So it matters if a game engine is designed from scratch to run in 1080p or not. We will probably see more and more games developed for the PS3 with FullHD or 1080p in mind.



Naughty Dog: "At Naughty Dog, we're pretty sure we should be able to see leaps between games on the PS3 that are even bigger than they were on the PS2."

PS3 vs 360 sales