Playstation 3 Buyer's Help. :(

[chuckles4753]

Hey guys,

I am a very happy with my Xbox 360. I Love it very much! I really love the Xbox Live Marketplace and the Xbox 360 so much, I wanted to buy myself a 120 Gig Hard Drive and I still do. But I am changing my mind on the HD DVD Drive to go Blu Ray or just simply not bothering with High Definition for now.
I made up my mind to go Blu Ray after seeing G4's coverage on the Adult Entertaiment Expo after finding out several Porn Companies are going to offer Pornos on Blu Ray Disc.Also Warner Bros, going Blu Ray Only influenced my decision. This makes me believe for sure that Blu Ray is going to win the Format wars.
So, I am thinking I might just buy a 499 Dollar Playstation 3 instead of the HD DVD Drive since I feel the other Blu Player Prices are an overpriced rip off for what they do. At least right now.

Problem I have now is that just now bought myself a 32 Inch Insignia Brand (Allegedly an LG with a different name on it, that was made for Best Buy) and it's a 720p TV that came with 2 HDMI Ports. Will the Playstation 3 play Blu Ray Movies, play its games and Upconvert DVDs in 720p despite being intended for 1080p TV's?