your sarcasm wasn't very well written. and either way, your comment was out of topic.

This was a known issue with PS3 from the beginning. If the game is 720p, it doesn't upscale to 1080i, it downscales to 480p.
Shit happens, but keep in mind it's still beta and could have 1080i support in the final version.

An HD-ready TV is not 2000 bucks unless you are planning to buy a 60 inch or something...

I thought the FW had been patched for this? The PS3 still downscales?

Also, I thought it was better to fix to 720p rather than 1080i on 1080i TVs as progressive will have sharper/clearer image... is that correct or have I read some bad advice somewhere?

the FW 1.8 made PS1, PS2, DVD, and BD movies upscale. it did not make PS3 games upscale.

720p vs. 1080i isn't the issue here. the issue is that some TV's don't support 720p and so get their games downscaled to 480p... while the 360 CAN UPSCALE EVERYTHING TO 1080i/p.

Okay - had no idea such TVs existed.  Tought break obviously.

These are the EDTV:s, not really common these days, but they are the first HDTV:s that came into market.

Bugrimmar - I think you have your anger is misplaced.  Developers aren't responsible for the lack of upscaling, it's the PS3.  Sony decided against including an internal hardware scaler, Microsoft did include a scalar(Ana/Onna?).  In this instance, Microsoft made a better design decision than Sony. 

This is really unfortunate for people in your situation with TVs that do not support 720p.  The games that do support 1080i do so because the developers spend additional time/resources to produce a native 1080i resolution.  This expense is most likely picked up by Sony.

Additional reading: http://arstechnica.com/articles/headstart.ars/2

Note, Sony's 1.8 fw added upscaling support of DVDs, PS1, and PS2 games.  Therefore, the PS3 will output 1080i for these as well as Blu-ray movies.  (I think you need to use HDMI, but I am not sure.)  Also, 1.8 included a horizontal scalar that developers can use in games.  Unfortunately, universal 1080i support is still lacking.  I feel bad for you, but I don't know if Sony is still working on this issue.  There are receivers on the market that include hardware scalars that reportedly work well with the PS3, but a new tv would be the cheaper option.  +1 for Microsoft on this one.

The PS3 has its hardware upscaler that most developers simply dont use or are learning to use right now.

I would say most of the more recent games have 1080i support through that upscaler.At least thats the impression I got from the last Eurogamer round ups.

Sonys policy seems to be right now giving support to the 1080i machines but for the 1080p upscaling let your HDTV do the work.It has some sense ,as if you have a FULL HD TV to effectively enjoy the 1080p display the truth is that the HDTV makes itself the upgrading so why bother?

But all PS3 games do support 720p, richt? Even if it isn't native.