I see we're in same boat. I got my fingers crossed on this one.
ok i read that on the 1.3 ps3 update, that aslong as the game can support up to 1080p, it will be able to play in 1080i. If the game can play only up to 720p, and ur TV doesn't support it, it will automaticlly downgrade to 480p. the 720p cannot be upscaled to play in 1080i. Most ps3 games are not being made to be able to output 1080p but many developers asre starting to wrok on it and fix it with patches, so i hope this fixes the problems in the future.
All the games i have for the ps3 are 720p only, so i can't play in full 1080p so haven't experienced anything thats True HD yet
don't know about xbox360s though