Please help with my PS3 settings..720P or 1080P?

[soright903]

Ok, here is my delima..

I have a Onkyo-805 receiver (1080P) and a lcd 42" 1080P Sharp Aquois.

I set up my ps3 display settings by choosing "Automatic" and it detects that I am capable of playing all resolutions. (all the way up to 1080P)

I have it set to 1080p, and often (almost always) text on the xmb, text in the broswer and text even in movies shake, making it very difficult to read. The screen also flickers (white snow) when browsing the net and on the xmb. I've never had any flickering playing movies but have had it happen in games. (NBA2k8 and Ninja Gaiden) Also expierenced text shaking in Hot Shots Golf. I would just turn off the ps3 and turn it back on to get it back to normal.

I tried another HDMI cable and got the same results.

Now, this is strange...today I changed the display settings on the ps3 to 720p by manually de selecting 1080p and 1080i and now there is no shaking or flickering at all. Everything is great. The browser appears different, its much wider, easier to read, and the xmb text is bigger and easier to read. On 1080P everyhting was much more squished. (Is that normal?)

But I want 1080p and thought I was capable of that. (Judging by my specs I should be) I dont get it....when I chose to let the ps3 detect my settings it chooses all resolutions including 1080p for me, so shouldnt that be my default settings?

Any thoughts? Thanks for any help.