Yes and no.

It does 1080P, but does not convert everything to 1080P.

It also does HD sound, but w/PS3 it actually shows up as PCM and no Dolby Digital HD on the receiver. If you run bitstream, the best I get out of it is DD Ex.

I am not saying that it won't do 1080P. With my PS3 via HDMI its all 1080P all the time.

I just want to caution you on the up-conversion. My 360 and Wii only upconvert to 720P through component video. My 360 directly into my TV displays @1080I.

I would caution on Onkyo's up-conversion of any format. My 805 displays any format not named HDMI in 720P. I ran my 360 component direclty to TV for a while until I decided it didn't matter that much and ran it to my Receiver.

I have an Onkyo 805 w/GR research 7.1 and its fantastic. You MUST go uncompress audio. I think Timothy who said it, but Onkyo makes a pretty solid Receiver for the price and start small with mains and center channels first.

I also second AV123 speakers. The owner of GR research helped design them and every single person I have talked to was wildy impressed with the bookshelf speakers. Buy a set of bookshelf speakers, you can always use them as rear surrounds when you purchase something bigger/better at a later date.

I say stay away from Bose. They are good speakers, but they are a tad overpriced so you can find something comparable for less.

THis is my first post so humor me.....

This is the lead in for the actual topic...

I purchased my PS3 2 weeks ago. I plugged it into my Receiver via HDMI and turned it on. Put in Resistance and played....

Wasn't too impressed with the game, but it did look nice. Sounded pretty good. I then upgraded to 1.93 (1.51 came with the unit) and BAM. Entire new worlds opened up....at least menu options.

I then started to play with my Receiver. I wasn't seeing Dolby HD so I got a little miffed. I did some more research and found the you can run PCM (PS3 does conversion) or bitstream (receiver does the converting). Here is what I found.....

My receiver is an Onkyo 805 that outputs to my TV via HDMI. GR Research speakers running 7.1. PS3 is hooked to my receiver via HDMI.

Test Disk was House of Flying Dagger on Blu Ray. All this is subjective to my ears so different people may not hear it like I do.

The second scene with the drums....

Using the PCM option on my PS3 I heard more forward sound. If you put this up vs DD through an optical cable you will be able to tell instantly that there is something more. The sound depth was incredible. I was nearly floored not by the stuff I heard, but by the sound I never heard before. There are certain parts of the scene you can hear people breath.It was just crazy intense. In short, Dialog and run of the mill background noise is still crisp and clear, but the depth is HUGE now that you can hear individual "noises" now that the audio is uncompressed.

Now I switched the option to Bitstream and let my Onkyo do the decoding...

Yeah..not that much different. There seemed to be better imaging from my front 3 speakers than with PCM, but nothing of Note. The center and rearsurrounds seem to be more active than before, but nothing you would notice if you were just watching a movie. Bass reproduction was on par with PCM performance.

I am now in process of comparing the Mission Impossible 3...more to come later.

I am curious to what others have found.

Red wings from Final fantasy 2

opening orchestral sequence take you pick

Final Fantasy 3 kefka theme

Sorry I am a huge fan of Nobuo Uematsu.