Holy fucking shit its impressive!
Ok, so I got it running through a 42" plasma tv, but only using the standard av lead at the moment, and it still looks about 50 times better than my PS2.
Dont have a HDMI socket on my tv, but the component lead I have ordered should be equal to a HDMI anyway!

Got three games in the bundle.
2 FPS type thingees and a driving game.
Motorstorm is pretty damn impressive, but really comes into its own when you use the first person driving view as the sensation of speed is overwhelming.
Also, when I flipped the car the first time I started to actual move as if I was really rolling!

Call of duty 3 looks great, but its gonna take some getting used to with regards to the targeting and enemy recognition, as sometimes its hard to make out who is the enemy and who is an ally because the uniforms are so similar.

Resistance:Fall of man, looks stunning, but once again its gonna take some getting used to (mainly because I hae been so used to playing Black on the PS2).

The motion sensor in the controller is something that looks like it could be hit or miss, depending on the game as I found it quiet useable in Call of duty, but to difficult in Motorstorm!

The wireless controller is a really nice addition, and definetly a lot better than the old wired controllers.

So far, I have only tried about three or four PS2 games in it, of which none worked.
Quite frankly it doesnt bother me really as I still have the PS2 plugged into the tv as my new tv has more input sockets than I have things to input into them!
Also, with later software upgrades, this could all end up being sorted.

Not had a chance to really look into what it can and cant do yet as it arrived a lot later in the day than I'd originally hoped (damn postal service), but I cant really see myself ripping CDs etc with it!

Once they start bringing out games that utilise the graphics even more, I think my eyes will start bleeding!