TV displays at 480p it should be at 1080i.

You don't. The TV's resolution can't be changed. Only the signal resolution from the source can be altered.

The TV reports the resolution of the incoming signal before it is scaled. If you have a BD player you can see the effect of changing the resolution setting from 480p, to 720p, to 1080i, to 1080p 60, to 1080p 24. The last three (the 1080 resolutions) shouldn't look too different with a Blu-ray apart from movement because the native picture is 1080p 24 and the TV is simply converting it back to 1080p 24 for display.

Your TV should automatically switch to 1080i if the source input is in 1080i format. Also, since your TV does not have HDMI, you must use the component 1 or 2 inputs (using component cables) for 1080i source material. You cannot get 1080i from composite or s-video inputs. You should be able to switch to the component inputs using the remote or the front control panel using TV/Video button.

Video Output Settings Adjust the system's video output settings. Select the best output settings for the TV in use.
1.
Check the resolution supported by your TV.
Resolution (video mode) varies depending on the TV type. For details, refer to the instructions supplied with the TV.
2.
Select (Settings) > (Display Settings).
3.
Select [Video Output Settings].
4.
Select the connector type on your TV.
Resolution (video mode) varies depending on the type of connector used.
Input connector on the TV Supported video modes (NTSC region) *1 Supported video modes (PAL region) *1 HDMI 1080p / 1080i / 720p / 480p 1080p / 1080i / 720p / 576p Component / D-Terminal *2 1080p / 1080i / 720p / 480p / 480i 1080p / 1080i / 720p / 576p / 576i Composite / S Video *3 480i 576i AV MULTI / SCART *4 480p / 480i 576p / 576i *1 The video mode options vary depending on the region where the PS3™ system was purchased. In North America, Asia and other NTSC regions, 480i video mode is displayed as [Standard (NTSC)]. In Europe and other PAL regions, 576i video mode is displayed as [Standard (PAL)]. For details, refer to the instructions supplied with the product.
*2 D-terminal is a connector type used mainly in Japan. The resolutions supported by D1-D5 are as follows:
D5: 1080p / 720p / 1080i / 480p / 480i
D4: 1080i / 720p / 480p / 480i
D3: 1080i / 480p / 480i
D2: 480p / 480i
D1: 480i
*3 Composite is the connector used to connect the AV cable that is supplied with the PS3™ system. S VIDEO is a format mainly used in Japan.
*4 AV MULTI is a format mainly used in Japan. SCART is a format mainly used in Europe. If [AV MULTI / SCART] is selected, the screen allowing you to select the type of output signal will be displayed.
5.
Change video output settings.
Change the resolution for the video output. Depending on the connector type selected in step 4, this screen may not be displayed.
6.
Set the resolution.
Select all resolutions supported by the TV in use. Video will automatically be output at the highest resolution possible for the content you are playing from among the selected resolutions.*
* The video resolution is selected in order of priority as follows: 1080p > 1080i > 720p > 480p/576p > Standard (NTSC:480i/PAL:576i).

If [Composite / S Video] is selected in step 4, the screen for selecting resolutions will not be displayed.
If [HDMI] is selected, you can also select to automatically adjust the resolution (the HDMI device must be turned on). In this case, the screen for selecting resolutions will not be displayed.
7.
Set the TV type.
Select the type of TV in use. Set when only SD resolution (NTSC:480p / 480i, PAL: 576p / 576i) is to be output such as when [Composite / S Video] or [AV MULTI / SCART] is selected in step 4.
8.
Check your settings.
Confirm that the image displayed is at the correct resolution for the TV. You can go back to a previous screen and revise the settings by pressing the button.
9.
Save your settings.
The video output settings are saved on the PS3™ system. You can continue on to set audio output settings. For details on audio output, see (Settings) > (Sound Settings) > [Audio Output Settings] in this guide.



Source: http://manuals.playstation.net/document/en/ps3/current/settings/videooutput.html

You can find it in the TV system menu under 'display properties',

TV Settings, HD settings, options should be 480p 720p 1080p 1080i. You want 1080i

your dvd is set to 480p. if it is a convertable dvd player set it to 1080i. the tv sets itsef to whatever the dvd player displays. if not all dvd is 480 to 720 p. blu ray will get you top notch 1080 display.

Adjust the system's video output settings. Select the best output settings for the TV in use.

1. Check the resolution supported by your TV.
Resolution (video mode) varies depending on the TV type. For details, refer to the instructions supplied with the TV.

2. Select (Display Settings) under (Settings) in the home menu.

3. Select [Video Output Settings].

4. Select the connector type on your TV.
Resolution (video mode) varies depending on the type of connector used.

Input connector on the TV Supported video modes (NTSC region) *1 Supported video modes (PAL region) *1
HDMI 1080p / 1080i / 720p / 480p 1080p / 1080i / 720p / 576p
Component / D-Terminal *2 1080p / 1080i / 720p / 480p / 480i 1080p / 1080i / 720p / 576p / 576i
Composite / S Video *3 480i 576i
AV MULTI / SCART *4 480p / 480i 576p / 576i
*1 The video mode options vary depending on the region where the PS3™ system was purchased. In North America, Asia and other NTSC regions, 480i video mode is displayed as [Standard (NTSC)]. In Europe and other PAL regions, 576i video mode is displayed as [Standard (PAL)]. For details, refer to the instructions supplied with the product.

*2 D-terminal is a connector type used mainly in Japan. The resolutions supported by D1-D5 are as follows:
D5: 1080p / 720p / 1080i / 480p / 480i
D4: 1080i / 720p / 480p / 480i
D3: 1080i / 480p / 480i
D2: 480p / 480i
D1: 480i

*3 Composite is the connector used to connect the AV cable that is supplied with the PS3™ system. S VIDEO is a format mainly used in Japan.

*4 AV MULTI is a format mainly used in Japan. SCART is a format mainly used in Europe. If [AV MULTI / SCART] is selected, the screen allowing you to select the type of output signal will be displayed.


5. Change video output settings.
Change the resolution for the video output. Depending on the connector type selected in step 4, this screen may not be displayed.

6. Set the resolution.
Select all resolutions supported by the TV in use. Video will automatically be output at the highest resolution possible for the content you are playing from among the selected resolutions.*
* The video resolution is selected in order of priority as follows: 1080p > 1080i > 720p > 480p/576p > Standard (NTSC:480i/PAL:576i).
If [Composite / S Video] is selected in step 4, the screen for selecting resolutions will not be displayed.
If [HDMI] is selected, you can also select to automatically adjust the resolution (the HDMI device must be turned on). In this case, the screen for selecting resolutions will not be displayed.

7. Set the TV type.
Select the type of TV in use. Set when only SD resolution (NTSC:480p / 480i, PAL: 576p / 576i) is to be output such as when [Composite / S Video] or [AV MULTI / SCART] is selected in step 4.

8. Check your settings.
Confirm that the image displayed is at the correct resolution for the TV. You can go back to a previous screen and revise the settings by pressing the button.

9. Save your settings.
The video output settings are saved on the PS3™ system. You can continue on to set audio output settings. For details on audio output, see (Settings) > (Sound Settings) > [Audio Output Settings] in this guide.

Call Mats for original phiilps hand unit 1-800-628-1118

The TV has a automatic scalier chip installed so it depends on the input signal that you are using. For example you are using a HDMI connection with a xbox 360 and you set the display setting to 720P then the TV will display it in 720P. If you set it to 480P then it will display it in 480P.

check that you have all avalubal resulutions sulected in your displt settings i.e. 480p 720p 1080i and 1080p all the ones your tv will support my ps3 was doing the same thing untell i checked 480p as well as 720p and 1080i now when I play a dvd my tv swiches to 480p and the dvd will play.