1) increased resolution requires more system horsepower so the system is not running at as higher FPS as it might on the smaller 4:3 screen.
I'm more familiar with the 360 here than the PS3.
Games that run in 4:3 aren't rendered at a lower resolution 95% of the time. They are almost always rendered at 720p and downscaled to 480p with black bars added. There is no overhead in the downscaling. Performance will be the same. There are a few games that will actually render in 4:3, but they still use a higher resolution.
2) the TV is ssuffering from is known in the industry as input lag caused by longer response times.
CRT tv screens have minimal next to nothing in response time delays.
TN tft pannels often have a 5ms or somtimes less response times.
Larger panels used in TV screens are often of the *VA panel technology type and have a response time of around 8ms.
Response time and input lag are two different things that do not relate to each other. Response time is how long it takes for one pixel to change from one shade of grey to another. They almost always cheat and use a grey-to-grey rating. Changing from one complete color to another takes longer than this rating.
Input lag is how long it takes for the image to be output from the device, fed into the LCD, and then processed and displayed. Input lag is generally around 10-25 ms depending on the panel. If your LCD has options for automatic contrast adjustment, that will drastically increase input lag.
If I were to take a stab at the issue at hand, I would blame input lag, especially if switching from a CRT to a LCD. You
will feel a difference. Give it some time and you'll get used to it and not even realize it's there.