:blink: That doesn't make any sense at all
It makes perfect sense - it's 1080p in that it has 1080 vertical lines, but it only has 1280 horizontal lines. Obviously you can't use this resolution for widescreen gaming, but if you're rendering, say, a center element for a menu, you can do it, and then say your game is 1080p. All marketing.
So, it's as if the resolution of an upscaled 720p image is equivalent to some resolution between 720p and 1080p (not technically, but rather just as a way to give an idea of what graphical difference is being made)?
No, an upscaled 720p image is 720p. There is no quality improvement from upscaling - this isn't CSI. In very simple terms, upscaling is just stretching the image to a bigger size. Both consoles "filter" their upscaling, though. Wheras just making an image bigger results in bigger pixels, filtering this lets you... sort of blur the difference. It doesn't introduce any more detail, but it does make the upscaling less obvious.
And just for effect:
You can not ever introduce more detail into an image. If you render at 720p, that's your level of detail, and upscaling does not add any more.
Console manufacturers don't lie to you when they say things are 1080p, they just don't tell the whole truth. If they lied, they could get into trouble - but just telling you a little and letting you assume the rest? Apparently that's fine. Ain't marketing great, kids?