I have no problem at all with the PS3 as a Bluray player - the pictures are beautiful at 1080P and it's upscaling is brilliant.
TBH I don't really understand (or want to know) what Dolby 7.1 is but the surround sound that comes out of it is great too.
+ As the BR format moves forward and we go to Profile 2.0 later this year, the PS3 may be the best way to keep up to date.
With a stand-alone player you're pretty much stuck but with the PS3 Sony can update it anytime with the PSN update to take advantage of the extra features.
Even for those players that can't it's not the end of the world as the new stuff that's getting added is superfluous anyway. They'll still be watching BR movies in HD with surround sound + browsing the disc menus, etc. which is all you need.
Edit: link here:
"The only Blu-ray player which can upgraded to use all the features is Sony's PlayStation 3, because it comes with the right hardware built-in and online access."
BBC NEWS | Technology | Blu-ray future limited for some