We (ie. a few friends and I) have done some testing using the PS3 and a number of HD displays available to us including Samsung DLP, Polariod plasma, LG LCD, Dell LCD monitor, Toshiba CRT HD Projection, and RCA CRT Tube. Based on our, admittedly limited, sampling the lack of internal scaling definitely created a number of issues for us. One of our sets was limited to 720p via component, which was very strange, and while looking great with our test games, was utterly unable to play Blu-ray content which apparently only output at 1080i/p? An other was limited to 1080i, so movies yes and games no. It was the oldest TV of the bunch, and probably the most common case limitation on older HD sets.
Every other display was capable of accepting every input signal needed and scale it. But even in these scenarios all is not perfect. Switching resolutions causes the screen to black out while re-syncing, a minor nuisance. But every once in a while, they wouldn't sync back properly, requiring the always fun reboot. The worst thing we noticed, is that on all but one display, changing resolutions effected brightness and contrast. If we adjusted the display to be optimal for HD playback, games were too dark. Adjust for game play and HD playback becomes slightly washed out. We also noticed some sets without a "game mode" type option, had differences in processing speeds at different resolutions requiring us to manually change our A/V delay sync to avoid lip sync issues, etc. For us, it was more difficult to notice audio delay in games than in films, so I would tune for 1080i/p and deal with 720p.
I know a lot of people think the lack of being able to provide a consistent display rate isn't a big deal, since most newer sets can adjust. But I find it annoying and it exactly like XBox 1 in that regard, luckily the TV landscape has improved in the last 4 years.
