Yes, according to IGN. It won't upscale 720p to 1080i; rather, it'll downscale it to 480p. http://ps3.ign.com/articles/746/746282p1.html Here's a discussion thread at Evil Avatar. Apparently, it's true. http://www.evilavatar.com/forums/showthread.php?t=20881 The only launch game I wanted was Resistance, but it's a 720p game and my TV won't do 720p. I'm now not really disappointed about not being able to get a PS3 at launch; I'm not sure it's worth $660+ for a next-gen game in 480p. I don't know if a firmware update could allow for upscaling to 1080i. I still hope to get a PS3 if this is done. And I still hope to get a Wii on Sunday.