As the next-gen parade continues at E3, many people have stopped by to comment on their opinion of Sony's upcoming console after it was revealed that at least two of the upcoming titles would definitely be running at 720p, not the 1080p Sony has been touting as the true definition of HD. Just to clarify, no one has suggested that PS3 would not be able to output games at 1080p (well, no one suggested it until Sony revealed the $499 model would be without HDMI anyway).
After all that, IGN took a look around and has only found two games on display targeting 1080p. The upscaled-GT4 demo Gran Turismo HD, and Wardevil, showing a real-time tech demo but non-playable. It is likely that if you have a TV that can accept a 1080p input the PS3 will be able to upscale games rendered at 720p or 1080i to match, just like the Xbox 360 does. How soon until the first major native 1920x1080 game hits? That still remains to be seen.