Well the PS3 has two 256MB of RAM and the 360 has just the one chunk of 512MB. That means the PS3 has to be passing data between the RAM and video RAM. The 360 doesn't. That reduces the amount of texture data the PS3 can use at any one time (possible reason for the PS3 version being lower res). The Blu-Ray can hold more data, yes, but that data has to be streamed from the disc to load parts of the game. Since the Blu-Ray drive's data rate is slower than the 360's 16X DVD drive, it can't stream quickly enough, which why many PS3 games need to be installed.... that extra space doesn't make a lot of difference if you can't get it all off the disc quickly enough. So.... as more data is added to the Blu-Ray, the bigger the install size will get. Segmented, smaller, levels get around that, but GTA4 is all there at once. If they had to reduce the resolution down from 720p it would suggest the system wouldn't run it as well at 720p. I doubt they did that for the fun of it.