Hopefully tomorrow I will be able to post my experience using the PS2 with my my new Toshiba 65" widescreen projection TV. The television is HD compatible, but as you surmised, it requires an external HD decoder to run in HD mode. I don\'t have access to a High Definition signal now, so I don\'t really care about that feature yet.
As for the PS2: As Videoholic said, HD capability in the television is irrelevant because the PS2 output is strictly interlaced 480i (or is it 540i... I don\'t get that). In any case, it\'s standard NTSC video resolution.
I\'ll give you the gist of my upcoming post: If you\'re going to buy a high quality TV, especially with a 16:9 aspect ratio screen, you\'ll need a new DVD player. The PS2 is such a poor DVD player, I consider it unusable for anything except 4:3 video material like DVD versions of television programming.
P.S.: Videoholic, please read the topic "Tech Question, Please Help" in the Off-Topic forum.