They'll upscale it to a 720p native resolution, meaning it will look great on your hdtv. Although it will be a port, they are remaking Kratos' character model with updated textures, plus other environment textures that look bad in 720. They also mentioned that they will be completely remaking the HUD graphics, so you don't have to worry about seeing giant pixelated symbols on the rerelease. Almost forgot, they're adding 2x anti-aliasing as well, which means it will have some of those nice, glowy next-gen effects.
It won't look like a ps3 game, because it isn't, but it will look better than the ps2 originals (unless they really screw it up somehow).