Killzone's multiplayer mode actually outputs natively in 960x1080 resolution, half of the 1920x1080 standard for "1080p." To output full 1080p graphics, this source image is fixed with a "temporal upscale" that fills in gaps with a horizontal interlace made up of pixels from the previous frame. The result is graphical performance that the lawsuit (and many reviews) call "blurry to the point of distraction."
Last time I checked that's called interlaced video, not progressive. Just because source video is 1080i, but goes out the HDMI video transmitter chip as 1080p it does not make it OK to call it 1080p since the source video is not progressive.