Ok,
I cannot get it to 1080p but I am getting exhausted and stopping for the night. AFAIK its not possible, but I will spend more time. Basically I am starting at 720p or 1280*720 - both work reliably. As soon as I go up to either 1080i, 1080p, 1650*1050, 1920*1080 etc etc I cannot get an image. However, I am willing to keep going (tomorrow!).
Now for the interesting bit. The quality is... interesting. From far away it looks REALLY good. The quality of thescreen is way better than my 42" Panasonic Plasma. However, up close its a different story and sadly I think most of have a iMac in a Office environment and tend to sit quite close. I am short sighted and without my glasses I need to be about 5 foot back to not see the problems and ideally more like 6 or 7 foot.
Here is a image taken about 5 foot away (sorry there is not much going on but Ezzio in this picture looks about right):
Up close its very pixelated (note that this is not a computer zoom - its a separate photo with a Optical zoom in on a DSC WX1)
I know my Plasma doesn't look quite that pixelated up close.. Mind you, I don't have a expensive LCD to compare it against.
So, make your own mind up. Tomorrow morning before work I will try to load up MW2 but the MRS is demanding I stop this now... :-(
Oh and there is ZERO controller lag. I played a game of FIFA 10 (the pictures came out terribly as you cannot easily 'stop' the action). Assassins Creed 2 is felt perfect too...