Just to clarify. That goes for people with older HDTVs capable of ONLY 1080i (and obviously 480i/p) As of right now it will downscale to 480p (standard definition) on those sets rather than upscaling from 720p to 1080i.
99.9% sure it is just an overlooked glitch that will be patched now that it has been brought to Sony's attention.
I say that because the PS3 is more than capable of upscaling from 720p to 1080i on sets that can also display 720p.
Rest assured this will be made a HUGE deal by everyone as the joy that apparently is finding and picking apart any and every fault possible with the system continues in weeks to come.