Native Resolution vs. Supported Resolution...What's the difference?

[Heidern]

So I think I know the answer to the question but I thought I'd ask. Say we are playing our games on a tv set with a native resolution of 1080p. And let's take Grand Theft Auto IV as a sample game, since we know that its native resolution is actually below 720p. If I set my PS3 up in a certain way the game will output a supported resolution of 1080p. Or, I could leave the PS3 settings at the auto-detected values and the game will output at 720p.

So the question is, which way is better? I would expect that the tv is automatically taking the 720p input signal and displaying it at its native resolution, so it scales the image, whereas the other option has the PS3 upscaling the graphics to 1080p and then outputting to the TV. I would think that the latter would require more work from the PS3 (to what extent, I'm not sure), but that both would produce a comparable image.

Thoughts?