Questions about HDTV/PS3..

[Blu_Ray_UK2007]

Ok, please let me say before you read on.. some of these questions may have been asked before.. but i'd appreciate the guy's here who know what they talk about to give me an answer, not a link.
I consider myself tech savvy.. but i'm new to HD and need some questions answered.

Ok, to start I got my HDTV in december, and so far have had nothing HD to watch.
I have HD Cable coming tomorrow, and the PS3 on the 23rd.

My TV only has DVI, no HDMI which has bugged me since day 1.
I have bought a HDMI>DVI cable, and plan to use this with a 4 way hdmi/dvi switch box.. so I can use my ps3/cable thru the one dvi port.

However, I seem to be reassured that DVI will provide me the same quality as HDMI would.. my TV is HD Ready.

However what is confusing me is what resolution I need to use when I get my PS3 to make the most of my BR's..

The manual for my tv says "Your TV has HD Ready feature, so it supports analouge YPbPr (component) and DVI (or HDMI) as a HD input to allow full compatibility with HD video sources.

The store where I got the TV says Resolution 1366 x 768 pixels.
Though, the manual says in a section under connecting your pc via dvi

DVI INPUT TYPICAL DISPLAY MODES
The display has a maximum resolution of 1280x720 vertical sync, frequency range of 50-60Hz and a horozontial sync. Frequency range 15-45KHz.
I'm not sure if thats just for pc input or not.

What i'm trying to figure out is.. are br's really going to look good on my supposed "hd" tv.. and what resolution should I output at with the PS3?

If it helps my tv was only £500 due to a strict budget (thats about $1000)

Any help is much appreciated.. try not to confuse me even further