That's the word on the street. Part of Nintendo's effort to keep the price down.
Personally, I think it's a smart move. Nintendo is aiming at a $150-$250 price tag, most people don't own an HDTV yet and aren't likely to for another few years, and the Revolution is rumoured not to be nearly as graphics intensive as its competition, relying instead on the new controller to introduce a new style of gameplay.
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It might have 480p, but I think it's a bad move not to have full HD. Almost all my GC games have 480p, and they look great, as opposed to my PS2, which has about 0.