My nephew recently brought over his PS3. We connected the HDMI to the 720p pana. We ran the optical audio to the receiver. The output from the blu-ray disk playing on the ps3 was amazing. Even downconverting to 720p, the image was still outstanding. Still the upconverting does quite well. This fall, the new 1080p projectors are arriving. I am hoping the panasonic models break the 2k barrier.
All working well-no problems. Really enjoying the ability of my Oppo to play Xvid (AVI) format TV series captured in high def. Can get 11 episodes on one DVD. Watched all six seasons of Sopranos, three seasons of The Unit in 2008. Lost, Season 4, is up next. Oppo upconverts all DVDs to 1080p which the Panny plays fine. No need for any HD here.
EQUIP puchased in Aug 2007 from Visual Apex (great vendor):
Panasonic AX100U ($1300 after $400 rebate), Oppo DV-981 DVD player ($230) and Carada H110C, 110 Inch Diagonal Criterion Series Projection Screen - 1.78 to 1 in Brilliant White ($900). Carada screen is awesome value.