Sony BDP-BX2

[Dolemite]

I just bought a Sony BDP-BX2. HDMI to Philips 42" 120Hz 1080p LCD. I ran through the out of box setup wizard and chose HDMI as the output. Per the Sony product manual, choosing this setting sets the output to 1080p automatically. The problem I am having is the Bluray I tried to play only plays at 480i.
I put in Paul Blarth- Mall Cop and checked the resolution from the TV menu and the BDP menu. Both show it playing in 480i. What I tried:
1. changed picture format from the TV menu to all available options. no change.
2. referred to the BD product manual, video settings section. It said I could change the video output resolution by selecting "Video Output Settings" from the "Video Settings" menu. There was no choice for Video Output Settings in that menu.

So, unless this is just a matter of some Bluray discs I get from Netflix will be 480i, I am stumped. Any ideas? Thanks for reading my first post.