Sounds like a typical case of a shitty TV.

Last week, I brought home a 46' Inch Toshiba 1080p LED LCD TV valued (by the furniture store) at $1700.  I took it home, hooked up my PS3, tried God of War 3 and Coraline on Blu-Ray.  The difference was noticeable but not too much better than my 32' 1080i/720p TV.  I only used component cables, though.  I wound up taking the TV back.

I plan to buy a 1080p TV (probably a Vizio) in the next seven days, though.  It's just that when I got it into my house, the difference between 720p and 1080p was not what I'd hoped for--and on top of that, until I realized what was going on, the PS3 would play video in 480i!!  Luckily I went to settings and made some adjustments.  As for the comment of 720p not being much different from Standard def digital satellite quality--I'm with DirecTV and I can DEFINITELY see the difference between standard def channels and HD channels!!

This is what i originally thought as well, but apparently HD is not to do with that if its a game, because the data stored on the disk is numbers, codes etc (except for audio and video), so the codes or numbers are translated into the resolution the hardware allows. therefore if the data is coded in 720/1080p resolution, the information sent to the monitor is displayed in that resolution.

the reason you would need a HD cable is because you need a better cable to allow for preservation of that signal from the hardware to the tv.

so in reality you are getting a true HD picture on both consoles (to the best of my knowledge). however for films the data needs to be written onto the disk in HD to be displayed in HD. so i think this means for the 360, when you watch cutscenes that data is not in true HD, but everying else is. but i mean i could be wrong, and it could just bt the PS3 does true HD and the 360 only does upscaled.

Yeah, the industry says so to standardize for the regular joe.  Doesn't make the actual meaning behind it go away, which I already explained.  

You might as well ask who has the bigger penis.

Why shouldn't a 360 disc being able to hold a 1080p cutscene ?

Dont worry, i'm wrong about that. it can hold a 1080p cutscene, depeding on how many cutscenes there are. most games i know of only do 720p cutscenes anyway.

but i meant with films like Star Wars, etc, those films are pre-recorded, when you publish those pre-recorded DVDs they cant be played in HD, but they can be upscaled using an upscaling chip some DVDs players have, but this is not true HD.

games dont have this problem because they're already motion captured and written on the DVD or blu-ray using HD (which is just a fancy way of saying 'more pixels on the screen'). the only problem with the 360 is that those pre-recorded scenes can take up considerably more space, so you need a larger capacity media or multiple disks for games with a lot of pre-recorded cutscenes.

so in a nutshell, both consoles are capable of doing full HD.

Why

If you're looking at a 1080p TV then I would advise a couple of pointers.  Make sure the screen resolution is 1920x1080, TV manufacturers can actually get away with putting a 1080p logo on the box if the TV will accept that input even if it doesn't display at the full resolution. 

Make sure you look for a good brand TV and read plenty of reviews.  A lot of peoples complaints in here about being able to see a big difference between 1080p and 720p is them just proving their TV's have a pretty crap scaler in fairness.  If you run a game in upscaled 1080p and it looks better than the same game at 720p native on your TV then thats a pretty sure fire sign your TV's onboard scaler is inferior to your now 5 year old gaming device.  That's crap imo.  Obviously a native 1080p signal trumps a 720p signal everytime and this is why many TV displays in stores will use 1080p animated Blurays where possible to give the TV the best chance to look nice.  It would be more telling to run a normal HDMI DVD player on each TV and see the respective quality difference for the vast majority of buyers imo.

I have roughly 13 PS3 disc based games and 1 PSN game that can play in 1080p and i've played them on different TV sizes and resolution but I mostly play on my Sony 60" LED tv and the 1080p games do look better than the 720p games. I think Borderlands is one of the best looking games that can run on 1080p, just love the artistic style of it.