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I find the whole lesser-resolutions-are-acceptable arguments somewhat odd.

Perhaps it's because I own a 1080p TV and can clearly see the differences? Perhaps it's because when watching DVDs or playing 720p games the upscaling is very noticable for me, yet bizarrely not for others? Perhaps it's something else? I just don't know.

What I do know is that I want 1080p for all my games, if possible. If I compare Tekken 5 Online, Locoroco Cocorecho, PixelJunk Monsters, Super Stardust HD, or any 1080p game with most retail release games, the differences are immediately apparent. Ratchet and Clank looks great, but it is not anywhere near as sharp as the aforementioned. Similarly, Uncharted is amazing, but it is clearly upscaled, and does not look anywhere near as sharp or detailed as a 1080p game would. Personally, I'd prefer all games to be in 1080p, and I can't really understand why others wouldn't.

For example: when setting your PC up, do you set it at the lowest resoultion: say, 640x480? Erm, no, it looks crap, and you hardly fit anything on the screen. Neither would you be happy with 800x600, or even 1024x768. My laptop runs at 1440x900 (I have a pretty big screen for displaying art when on the move), and I'd still prefer a slightly larger resolution if I could get it. More details, more on the screen, more space.

By comparison, 720p is typically 1280x720, and 1080p is typically 1920x1080. I know what I'd rather have displaying on my screen.

Indeed, when I play old games that run in low resolutions, such as Baldur's Gate that runs at 800x600 (if I remember correctly), it looks like crap on my monitor: the resolution is too low, details are jaggy and lost, faces are blobs, etc.

Similarly, running upscaled games from 600p, or 720p, or, indeed, anything that isn't 1080p, loses detail. And for someone with a 1080p set, I'd really rather that wasn't the case.

Fortunately, it seems that some developers are slowly figuring out the PS3 and will be producing games at the detailed resolution I'd prefer to enjoy, rather than an upscaled fuzzy-fest that, whilst being utterly playable, looks crap when compared to the alternatives.

So, sure, if you're happy with lower resolutions, then I'm glad for you. Personally, I am not, and will always prefer games to run at the best resolution for my TV. That is expressly not 600p, or 720p, it is 1080p, and I sincerely hope more games use that resolution natively in future.

However, to answer the OP: The PS3 does run games in 1080p, there just aren't many of them. Indeed, many of the PSN titles run in that resolution, as do Blu Ray movies. Thus, a 1080p display is well worth the asking price, as many titles will look sharper, and movies will look far better. Further, many developers are apparently close to making 1080p run smoothly on the PS3, so the next generation of PS3 titles will also look better on a 1080p set.

Also, much like a monitor will show more on-screen when you up the display resolution, the PS3 displays more on-screen when you up its resolution to 1080p for a 1080p TV. For example: the XMB shows more, you see more when browsing the internet, and similar.

In short: 720p sets for PS3 are not worth it if you can afford a 1080p TV, so, if you can, buy 1080p every time. I have, and I'm hugely happy with what I have.