If a game has a native output of 720p, the PS3 will only display it at 720p or 480p. If your TV only supports 480p and 1080i, it will display it in 480p.
That is another fucked up thing about the PS3. You might have a great fucking 1080p TV, but unless the PS3 game has a native output of 1080p (of which very few do), then you will be playing it at 720p. The PS3 can't upscale games to 1080p. Resistance, for example, is a 720p game, so when 1080p owners play it, they can only play it at 720p.
Meanwhile, on the 360, every game can be upconverted to 1080p.
PS3 = teh sux.