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PS3 Blu Ray Questions?

I purchased a PS3 yesterday and got a 6 ft HDMI cable from walmart. I also bought 2 Blu Ray disks. Black hawk down and Devils rejects. After watching blacvk hawk down on the ps3 and then going back too my xbox 360 to watch a few entourages on a regular dvd i could not tell a difference nor was i blown away by the quality of the PS3s Blu Ray. It says its on 1080i because i only have a 720p TV. Now is there something special i need to do because it really doesnt seem like its actually doing 1080i. Or is it because these are older dvds that they converted to blu ray? Would the quality be better on a Blu ray on a newer movie since blu ray was not out when the DVD was released? Or what do i do? Its real grainy and not noticble that its even blu ray.
So going from watching a regular dvd on what ever resolution is the same as watching a blu ray disc 1080i?

The resolution of 35mm film as used in movies is around 7680 x 2048 so resolution will never be an issue.

The quality of the DVD, or blu-ray will always depend upon the quality of the master though, film stock does decay and get worse over time, so although they have the resolution, old (20+ years) wont look as good as newer films.

Blackhawk Down isn’t a good movie to judge quality though. Slawomir Idziak (director of photography) chose to use washed out tones and a grainer picture, which means the image doesn’t look very different on DVD or blu-ray. If you look carefully though you will notice in the blu-ray version the image doesn’t have the level of Moiré effects (jaggies) that the DVD does.

The video is streamed at 28Mbps for the for the blu-ray version of Blackhawk, compared with 4Mbps for the DVD.

[edit]
The 1080p vs1080i arguement is pretty meaningless. They are essentially the same (for the movie viewer).
A Movie is shot at 24fps. A TV displays 60 frames, extra data is generated to fill the gap between 24fps and 60fps. This is accomplished by a method called 3:2 pulldown. It doubles the first frame of film, triples the second frame, doubles the third frame, and so on, creating a 2-3-2-3-2-3. So if it takes two frames to send interlaced, it doesn’t matter!