I think you misunderstood what I was saying. I wasn't referring to resolution but video quality. There is a difference. The quality of the decoding is what I am referring to. Look at the reference quality DVD players out now and you will see that the video quality (even though they output the same resolution) is superior to the radio shack brand using a crappy video processing chip set in them. If you compare the video quality of DVD players when they first came out to the video quality of them now, they have drastically improved. They both still output the same resolution (assuming no upconverting) but video processing chips have improved therefore, improving on picture quality.
So when I say that the PS3 will not improve in picture quality over time, that is true. The PS3 uses the Cell processor and software to decode. Where a standalone uses an optimized and dedicated set of video processors. Those chip sets in standalone will continue to get upgraded video chip sets with each successive unit and improve over time. The newer profile 2.0 players coming out are bound to have better video processing capabilities then the PS3 or at least I would hope.
There are at least 3 2.0 profile units around the corner. I am going to wait until then to make a decision.