Hold the phone, there...
ICO was intentionally rendered in a lower resolution than your average PS2 game. It is unknown at this point whether this new game will also share that aspect, but I'd be willing to bet that it will not run in low-res this time (based on some comments they've made).
You've had limited experience with the system, I know. ICO is low-res and Katamari is ultra grainy and fairly low-res. It can pump out image quality as good as anything on the other systems. Star Ocean 3 in 480p is amazing looking, for example. Just wait and see...