ic1male: yes, the PAL PS2 can output 480p, just not many games support it! (some of the ones that do include be Soul Calibur 2, Out Run Coast to Coast and Shadow of the Colossus).
Do you have any problems with aspect ratio on a freeview box? I tried hooking up my Sky Digital, but I couldn't manage to get it to display at 16:9 (the Dell screen is 16:10, which means there should be thin black bars top and bottom). For some reason, consoles don't have this problem and seem to auto adjust.
I've taken some console pictures below, sorry they're not superb quality, but should give you an idea of how it looks. The jaggies are more visible when the image is moving and are not always captured very well here. The blurring on some images is just caused by the shutter speed of my camera, it definately doesn't represent ghosting of the screen!
Soul Calibur 2 at 480p
This one is a little jaggie when it's moving, lowres textures are noticeble in a few places on this screenshot:
http://i53.photobucket.com/albums/g75/simon567/soul.jpg
Shadow of the Collossus at 480p
Again, lowres textures are more visible than on a normal TV.
http://i53.photobucket.com/albums/g75/simon567/shadow.jpg
Outrun 2 on Xbox 480P
A lot of Xbox games look better due to higher res textures and better anti-aliasing, though Outrun is not the best example of this and looks very similar to the PS2 version:
http://i53.photobucket.com/albums/g75/simon567/outrun.jpg
Amped 2 on Xbox running at 720p
Not many games support this resolution, but it looks great!
http://i53.photobucket.com/albums/g75/simon567/amped2.jpg
Overall I do like how it looks, even though some games which look great on a TV suddenly look less impressive on this screen! So long as you sit back a little, overall it looks nice.