I am also surprised to hear about Waveboys experience. Could it be a component thing? I have not measured it but i would be REALLY surprised if i had anything beyond 20-30 ms lag when gaming over VGA or hdmi. I have an LCD-screen to my computer with a confirmed lag around that. Measured input lag that is.. not the 2ms nonsense that is written on crappy TN panel. Actually it is an LG LCD ips-screen with great color and so on (however as with all IPS screen the black level... well sucks).
And yes, I have been playing games such as mega man as well. I used to be a competive gamer and only played on CRTs so I do recognize input lag.
This makes me really confused, but then again, I play in native resolution (Xbox 360) but I have tried 720p as well and haven't noticed a diffrence (Altough i might not have played 2d platformers in 720p!). Also it might be a euro vs US thing.
At least on the EU set you absolutely NEED to change to PC-mode (label input pc) to get the fast scaling that also looks good for games. The scaling for video-mode detected resolutions (720p, 1080p) is really crappy for gaming because there appear to be lots of filtering going on (however the colors are more accurate for movies).
This is way more important than the game mode. In fact, you cannot even chose game mode when in PC-mode as it overrides it. Some say that this re-labeling does not work properly on US sets, and in that case then you might have a problem.
I'd say that it is better to output 720p from the ps3 and have the tv upscale the game. Most games will be in 720p anyway so you will avoid extra scaling, and the tv scales 720p really well (if the input is label pc anway otherwise it is really soft).
I do belive you saying that the 480p component scaling is soft, but I would personally greatly prefer this since I would never want to have a clear and crisp picture of the jaggy pictures the Wii produces (I have owned a Wii but have sold it and not tried it on this set).
I understand if you prefer the brighter image an LCD can produce, personally this set produce a lot brigther then my eyes can take but we are all very diffrent there in our preferences. I burn my eyes watching my dad's tv but he prefers it that way
However, I still don't quite get what you are refering to with color pop. It might be some preference you have that I don't fully understand. To me color is about gamut, color decoding where really there is such a thing as right or wrong and everything else just looks weird, and of course gamma and contrast. I am guessing that there i som sort of "contrast enhance" in colors your after where you essentially get more colors than is encoded in the picture and thereby crushing the details and nuances. I used to have an LG tv that had such an option (called XD engine back then) and it really destroyed everything in the picture, removing all details and so on. But, well yes, there were extreme pop to the color that's for sure!
Anyway, I am sorry if me and some others here are giving you the wrong advice and have a very diffrent view on what a good picture is. This is in part an enthusiast forum, and many of us here want a picture that looks "right", according to industry standard so that when the picture is supposed to be green it will be green, and when it i supposed to be 23% grey it will be just that and so on. So we go to great lengths to get LESS pop to the picture, LESS sharpness, MORE noise, LESS saturated colors, simply because most TV's tend to procude this in an excess, adding something to the picture that just is not there.
So, I'd just like to say that I am sorry if me, and others, in our more "puristic" view of how an picture should lookd like (as unaltered as possible) recommend you something you do not want. That was never my intention.
I wonder if there is something weird going on over component. It certainly sounds like it and well I would not be too surprised if somethings are "broken" on a cheap set like this. Similar to how Assm0de found the SD resolutions to be heavily filtered over hdmi. I guess that is exactly what is going on, but MAYBE you could get it to change by renaming the label (again this works on my set...)?
Again to sum up: If i play games in 720p, or 1080p without re-labeling to pc-mode then there is noticebale lag AND poor (gaming-wise) scaling and it is day and night if you change this. At least on my EU set.
Also i have the 51". Could be something weird going on with the scaling to 1024*768 instead of 1366*768.