This situation needed a glorious explanation by Sony Europe, which basically boiled down to them saying, "It should also be noted that when playing the game on a PS3 via a component of HDMI lead, it runs in true 576p and not just an upscaled version of 576i. The Enhanced Definition (ED) output is forced from the PS2 graphics chip which is why a lot of PS2 games -- not just GoW II -- will look a lot better. By contrast, if you boot up the US GoW II on an NTSC PS3 and switch Progressive Scan mode on, there will be no difference as the emulator is pushing the 480p mode regardless. What this basically means is that the PAL PS3 is giving the best PS2 visuals you will be able to get anywhere!"
So, in conclusion, the European God of War II is already more HD than the non-PAL "HD." Hey, wait, we should be the ones pissed! Somebody get Sony on the phone -- we demand more HD from our "HD." We want 576p!