Well, I know for sure how to fix the problem with the white bars appearing at the top and bottom of the screen. From the main menu of the PS3, go to Settings, then Display Settings, then select Custom, then uncheck 1080i and 1080p, so that only 720p (and the unselectable 480p) is checked. Then boot up the game. Right off the bat you'll notice an increase in sharpness, with the black levels on the ESRB rating looking richer and the first 2K logo playing smoothly. Continue onto the game and you'll enjoy everything WITHOUT white bars. I just tested this myself and I'm astounded that it actually works.
However, I'm not sure but it seems like the framerate suffers more, but ONLY on the submarine sequence, which sadly diminishes the impact of Rapture's grand reveal by a fair margin. I didn't notice any framerate drops while swimming around and surveying the plane wreckage, though. Not in forced 720p. On 1080p, there was a slight, nearly imperceptible dragging of the screen when turning.
Hopefully the final retail build of the game will automatically default the system to the right setting. I don't want to have to change my display settings everytime I go to play Bioshock. Sure, it only takes 30 seconds, but it's the little things like watching my wallpaper change size that bug me.
Also, I noticed texture problems on the Big Daddy. Look closely at the dead one; while from afar they look like the right blend of brass and canvas, up close their textures are pixelated. Ditto for the back of the pistol; try clicking in the right analog stick to zoom behind the weapon and you'll see the textures there are pixelated. People would never notice unless they were looking for it, though, and once you're done zooming in on the texture and simply playing, you forget all about it. Kinda like RE4; it's a fantastic game with some poor textures you could agonize over, but when playing it's the last thing on your mind.
I'll wait for a final verdict on the retail version. I recently bought a PS3 (my only system other than Wii) to get MGS4/MGO and a Blu-ray player, and so I've never played Bioshock and have been looking forward to it. While I'm not a fan of shooters, I really enjoy the gameplay in the demo. I like bludgeoning corpses with a wrench and shooting confetti-filled balloons at the New Year's Eve party; the little interactive bits like this make the weapons feel very satisfying. The triggers feel great too; I don't see any problem there. And of course the atmosphere and world-building is amazing. After playing it last night, I felt like playing it again this morning while I was at school. So while I'm anal about a game's polish, I still feel compelled to play the whole game in spite of some technical shortcomings. Or at least, I think.
I really do wonder if this demo is an older build, though. Previews would've been able to say more than "It looks the same" if they played the demo. Plus, consider how the Motorstorm: Pacific Rift demo doesn't look anything like the trailers... Hmm.