On paper the 360 can only go up to 1080i but according to ATI reps it's GPU can output 1080p. They just didnt publish it because there were very very few displays that can do 1080p at announcement & most people wouldnt know what 1080p means. Doesnt benefit MS any to confuse people.
Sony on the other hand probably timed the 1080p spec for the PS3 to coincide with their HD display efforts. It benefits them to hype up 1080p as the holy grail.
IIRC the PS3 will only allow 1080p on a HDMI-spec'd displays and these displays are coming out just now.
All these graphics grunt is for not if you're still using a 5+ year old regular TV.
That's why I went for an EDTV (standard def TV + 480p) for the pscan DVD player & GCN) cause there was no local or recorded content in HD at the time.