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Try comparing something like 'Toy Story 2' and 'The great escape' on the same DVD player and you will see a big difference in quality due to the source images.
The only real downside I think the PSX2 DVD player will have is the region coding, as about 80% of my DVD collection is region 1 (for me it means the DVD features of the PSX2 are a waste of time :( ).
The latest official PlayStation mag has a mini-review by Steve Jarrett of 'What DVD?' magazine. He says:
"I've seen it in the flesh and, despite rumours to the contrary, can report that DVD playback is absolutely fine. Truth is, I've seen dozens of DVD players, from £700 top-of-the-range systems to £150 budget models, and there is hardly any major discernable difference in picture quality across any of them. Likewise, I've compared a Japanese PS2 to my own £600 Pioneer and I'm damned if I could tell them apart. Given that PS2 will generally linked up to a bog-standard TV, rather than a dedicated home cinema set-up, the answer to 'Is it up to scratch?' is a rather emphatic 'Yes'."
Okay, so it is in the official mag, but I usually find them fair enough. And the report is from a neutral.
Of course, until October 26th, everyone was judgnig the Jap PS2. There were no serious complaints. Now the US has had the machine for around three weeks; they're probably a much harder-to-please market than the Japanese, but there still haven't been any major complaints about the DVD quality.
The only way to be 100% certain, of course, is to wait until next Friday and judge for yourself. Or pop back here - I'm sure there'll be numerous reviews of all the PS2's features!
I am looking forward to the DVD but will not use it as a stand alone player as I am hoping to get a DVD player some time next year. But saying that I read somewhere, cant remember if it was in a mag or over the net, but Sony have reportedly said that they plan to make the PS2 a serious DVD player in the entertainment market.