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LordTheNightKnight said:
The things is that resolution takes up the frame buffer, since there are more pixels to manage. It may seem obvious, but many of the rendering tricks have to use all those pixels to help the graphics, and more pixels just means more work, and less of the frame buffer to use for other things (this applies to both systems).

Thus higher native resolution is actually a detriment to the best graphics. Unlike FMVs, where the detail is in the frames, games have their detail in the textures, which will still be HD, even if the screen resolution is low.

So just upscale them all, I say.

Very true. It's interesting to note that most of the games noted for their graphics are not 1080p. No one is going on and on about Virtua Tennis, but R&C, COD4, and Gears are all running at 720P or below and blowing people away. 

Obviously, it's not about the size of your pixels, but how you use them...