Changing resolution isn't really that hard, so they wouldn't need a border. For instance, I play PS1 games through epsxe at 1600x1200 when the ps1 normally functions at 320x240 (lower than the psp). For that matter, I play Super Gameboy games at 640x480 on my xbox without a border. I think that the borders were either the companies being lazy or for novely effect.
My idea for psp and ps3 was that the psp should wirelessly stream the game to ps3 and also act as a controller, while the ps3 upscales the images and displays them on the tv.