jonalan, welcome
yes, the ps3 can support 1080p, 1080i, and 720p. as of this moment, it doesn't upscale DVD's but a firmware update is supposed to correct this. lastly, any 720p issue you may have heard of directly relates to an issue with a few games and hd sets. there is a ps3 thread on here that can answer pretty much all of your questions.
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