PS3 as a multimedia machine

My family just bought a 46" Mitsubishi 1080p tv and we plan to get rid of all our old stereo junk and put in surround sound. Seeing as how we are getting rid of our DVD player and CD player and such, I was curious as to how good the PS3 will serve as a replacement.

How high does the PS3 upscale DVDs? Will it upscale it only to 480p or all the way to 1080p?

It is the cheapest Blu Ray player out there? Does this mean the image looks cheap?

Will the sound quality sound good if I stick a CD in the PS3?

Basic overall question, Sony totes this as the ultimate multimedia system. Are they right?

PS3 Has brilliant upscaling, Im not sure of res thought but I am sure it probably does.

Sound quality is brilliant.

Its a great multimedia replacement, I have done the same and the best part is blu ray option :D

Seeing as how the PS3 is the most inexpensive blu ray player, I think I can take a hit on the quality not being as nice as the ones that are 599.

300 in HD. Thats all I care about right now

1) Bluray player is excellent and as stated it can be updated through firmaware. While most bluray players will have this function (part of the specs) the PS3 will be able to adapt more than others since it has a cpu inside. Example with sound etc being updated

2) The sound options on the ps3 are great - cd's will sound as good as your sound system / tv allows them to. The PS3 will not be the limiting factor

3) DVD's will be upscaled to HD so more than 480p. My DVD player is collecting dust...

It is a MM machine - Sony is right