Higher resolution will always trump lower res/AA for me. Especially when viewing from a small monitor up close. When you put native res with no AA, against something running on a lower res plus AA.. The former usually wins out with a crisper IQ, with the other having a softer image - which imo is much worse off than a few jaggies and shimmering edges.
As with all upscaled images.. a lower resolution displayed than what the monitor/TV can handle, images will stretched out and details will get lost. For consoles, its less of an issue as you are sitting a couple of feet away and viewing on a larger display so aliasing is not as noticeable.
What I really want devs to do this (upcoming) gen is aim for 1080p for most, (if not all) consoles releases in the future as its pretty much a common place for HDTV's now. Even if they had to make small compromises like adding black borders or scaling down visual effects if performance is an issue. Just no more blurriness and I'd be happy with IQ. A bit of AA would be the icing on the cake.
