Again our friend BlimBlim at Xboxyde has come through in our time of need. There were rumors that it seems Project Gotham Racing 3 is not being rendered internally by the Xbox 360 at the full 720p resolution of 1280x720, but only being rendered at 1024x600 and upscaling.
The source was an anonymous poster on Bizarre's forums, but Blimblim has confirmed their findings, screenshots output via a devkit Xbox 360 from the framebuffer during photo mode are rendered at 1024x600 with 2XAA. Screenshots output from menus or when viewing saved photos later are rendered at a full 1280x720 w/ 4XAA. The game outputs to your TV in 720p and 1080i just like every other 360 launch title.
So it definitely appears to be true, now the questions are, how much do all those missing pixels affect the game, is Microsoft lying by saying all games will support high definition and what does this mean for the Xbox 360 as a whole? Let us know how you feel about the situation.