I know that it is possible under the BD specifications but with it being optional I thought that it might cause some delays in software because they wouldn't know whether to include full 1080 or SD PIP.
Maybe Disney is going to solve this dilemma for us
while Disney confirmed that Finding Nemo and The Chronicles of Narnia: The Lion, the Witch and the Wardrobe will both feature full-resolution PiP.
This is great news if I am reading this correct