I was speaking about PSP2 last night with a friend, and he was saying what he was and wasn't interested in, and how his PSP gets used - content and not games. The question of differentiation came up and the option of TV out. PSP supported it, but only at a tinyWell why spend processing power on something that isn't really usefull?
resolution you don't want on a full TV. If PSP2 supported native 720p out over HDMI and you could use it like a wired controller with games and movies on screen, it would offer something new. Like my Grand Vision. So certainly for movies and TV programmes 720p should be supported, and in the same way PS3 has lots of simplified 1080p content like PixelJunk Monsters, PSP2 could support lower resolution games most of the time but splash out on 720p games when it can do for a better large-TV experience.