sorry, I do not believe ps3 puts ps2 and ps1 games in 1080p.  and it definitely doesn't upconvert them from 720p to 1080p being as ps1 can only do 480i, not even 480p or widescreen, and ps2 can only do 480i,p, some other countries equivalents to the same resolution, widescreen, and with gt4, they tricked the television into accepting a false 1080i signal.  but it still looks great through hdmi.  Also ps3 has a lot of advantages over ps2.

1.  Playstation Network (free)

2.  Real HDTV signals, and every one at that.  480i/p, 720p, and 1080i/p.

3.  Connects with HDMI cable guarenteed (and can use HDCP, which even though XBOX360 Elite has the HDMI cable, it still will be sending compressed video data and compressed sound data, and may have HDCP, but if you have the HD-DVD drive (and you'd be an idiot to do that in my opinion due to the fact that HD-DVD is being dominated by Blu-Ray, as it should technologically, also Blu-Ray movies are usually CHEAPER!) the HD-DVD drive connects to the 360 with *gasp!* USB.  Problem with that is USB can NOT use HDCP, and will therefore cause problems, especially in a few years (though HD-DVD will hopefully have been abolished by then) given the fact that movie companies like their movies required to play with an HDCP compatable device, so when it's not played with an HDCP compatable device it cripples it, keeping it from running in it's full awesome-ness which it possibly can, which gets more and more necessary when displaying High Definition.

4.  Blu-ray movies

5.  Blu-ray games

6.  Guarenteed Hard Drive

7.  Native High Definition videogames

8.  Native Widescreen videogames (for those potential widescreen haters, it's not distorted, it's the way almost every movie ever made was shot, you get 30% more viewing space, and also it looks so sleek, theatre like even.)

9.  Unparalleled processor, giving a new level in processing ability to enhance games

10.   A new way of using memory (and it does have the same amount as the xbox 360, and the memory is used better too might I add making the memory a lot more effective than the 360's shared memory) allowing (not getting into details here but...) no latency which is a huge problem with the larger the memory you have.

11.  PSP connectivity

12.  Works real well as a media center

13.  FREE game demos, such as Ninja Gaiden Sigma, and a good handful of others which are really fun and let you see the games before you try them

14.  No need for multitap

15.  Helps cure diseases

16.  About 100,000 active PS3's have made folding@home the worlds most powerful supercomputer, and are contributing to no less than over 50% of the terraflops which the program gets, and sometimes even close to 2/3-3/4, helping research the causes of cancer, alzheimers, and a plethora of other diseases, contributing to years of research done in a single day.

17.  this should have been up near the top of the list, sorry.  Uncompressed 7.1 Linear Pulse Code Modulation 24-bit 192khz surround sound in game with an astonishing 512 voices @ once.  Much more than ps2, and a lot better than xbox 360's voices, and in a way better sound format too.  With out a doubt the biggest improvement to audio in consoles.

18.  Backwards Compatability almost 100%

19.  Easily replaceable Hard Drive.

20.   Can save PS1 games and PS2 games saved data on your Hard Drive, Eliminating the need to have Memory Cards (if you want to transfer saved data, get the adaptor for 15 dollars.)  (memory sticks still very useful)

21.  Internet Browser

22.  Full games available only for downloading from PS Network.  (varies in price, includes some PS1 games)

23.  Looks awesome.

24.  Really quiet.  Probably the most silent console I've ever heard that runs on discs.

25.  Final Fantasy has always been on the console that wins the console wars per generation.  It is slated to be a ps3 exclusive game.

If 25 good reasons why the PS3 is worthwhile isn't enough for you, so be it.  I could have listed more, but I didn't feel like it, and 25 is a good number to stop at.  But the reasons why you should get one just keep on coming, and I hate to say this, but give it 2 years, and then see how good it is.  Don't jump boat on Sony, there are many reasons why ps1 and ps2 were the two most popular consoles of all time, and the same reasons (maybe a little different to make it apply to this generation, but generally the same) still apply now.  Once it is multithreading (or multithreading more efficiently) XBOX 360 will not be able to compete, once again for reasons I will not get into (due to the fact that even the intellectually above average individual still probably would not understand, or maybe even care) basically due to some of the more easily overlooked things in the console, such as the L2 Cache, or for ps3 the L2 Cache equivalent.  Games programmed in Blu-Ray will be superior because everything will be uncompressed, and will remain that way for a long time, if not permenantly.  Games can be so large that the 360/Wii will be unable to ever play it.  There is also much more room for more content, which the other consoles will be falling far behind on.  I believe that all 3 next gen consoles are good enough (granted you want the games for them)  but I am the most impressed with the ps3.  But that is just me, and what do I know...  (IQ of 168, photographic memory, researches constantly, enough money to get whatever console I want in under 1 month working)

My opinion is:  PS3 is definitely much better, and if you don't believe so yet, wait till you have a HDTV, or in a few years, for it will undoubtably be worth it then.  If you need, wait for the first price drop.

Anyone disagree?   That's fine, these are my tastes, and I need the best of the best, I chose PS3.  I can back up my opinion very well, not that I'm trying to argue with people, but I would be interested to see what you guys think of my reasoning here, so let me know what you guys think of it please.