Wonder how much processing power the upscaling to 1080p needs over 720p/1080i, and if it's done mainly in software would it effect the more complex games.
Scaling is not nearly the power-hog that motion adaptive deinterlacing is on HD material so I just wanted to clarify in case you were interchanging the two.
That said, i cant see MS giving away any performance for this feature in regards to gaming, it would be interesting to see what role the video i/o chip has in all of this. The theory was that this chip was intrinsic to the video chain and thats why HDMI was not possible as the chip converted everything to analog. If its doing that here, then it seems like it might have/require some level of native 1080p support to even deal with a 1080p signal. If thats the case then it might be doing it on it own, leaving the rest of the system to its own business.