Sony has partially fixed the issue via devkits, there is a strong possibility in the near future that they will mandate that ALL PS3 games support 1080i, and for now is leaving it up to devs whether or not to patch existing games.
It's still not completely fixed, but it's definitely getting there.
In conclusion, the foretold yet hitherto unseen PlayStation 3 hardware scaler has made its entry onto the development scene with this SDK update. Its appearance should bring hope into the hearts of 1080i-only HDTV owners that all future games may support their television sets natively. They may also look forward to seeing patches to some of the currently released 720p-only games, should developers have the time and inclination to revisit their old code base and hack a new 960x1080 rendering mode into it.
Technical reading and source: http://www.beyond3d.com/articles/ps3scaler/
Stolen from chubigans on the IGN boards
It's still not completely fixed, but it's definitely getting there.
In conclusion, the foretold yet hitherto unseen PlayStation 3 hardware scaler has made its entry onto the development scene with this SDK update. Its appearance should bring hope into the hearts of 1080i-only HDTV owners that all future games may support their television sets natively. They may also look forward to seeing patches to some of the currently released 720p-only games, should developers have the time and inclination to revisit their old code base and hack a new 960x1080 rendering mode into it.
Technical reading and source: http://www.beyond3d.com/articles/ps3scaler/
Stolen from chubigans on the IGN boards