Actually, awful isn't a strong enough word. If you're trying to get your hands on a PlayStation 3 games console for the Holidays and you plan to use it to play PSone and PS2 games on it, you need to read this.[poll id=55]
It seems that there is a serious issue with the way the new PS3 handles PSone and PS2 games. The 480i games are outputted without anti-aliasing. To make matters worse, the output is jagged and contains a number of distracting screen artifacts. Take a look at the screen captures from the video below:
PS2 output - Lookin' good!
PS3 output - Gaaahhhhh!
See the entire video here.
This issue apparently has nothing to do with the TV used, cables or resolution settings ... it's just down to the console. Hopefully this can be fixed by a firmware update, but you would have thought an issue of this kind would have been picked up on by Sony some time ago.
I'm going to investigate this further and get back to you with what I find. Stay tuned!