According to kotaku.com, Sony Play Station 3 is expected to support resolution of up to 1080p! It is not clear, however, whether this only applies to games, or to BD movies too. In a survey for gamers Sony stated the following:
The PlayStation®3 will include BluRay™, the high definition DVD technology, and support games in resolutions of up to 1080p, (the highest supported standard on the market.)
The PlayStation®3 will include BluRay™, the high definition DVD technology, and support games in resolutions of up to 1080p, (the highest supported standard on the market.)