Remedy said today:
"Modern renderers don't work by rendering everything to a certain final on-screen resolution, but use a combination of techniques and buffers to compose the final detail-rich frames, optimizing to improve the visual experience and game performance.
Alan Wake's renderer on the Xbox360 uses about 50 different intermediate render targets in different resolutions, color depths and anti-alias settings for different purposes. These are used for example for cascaded shadow maps from sun & moon, shadow maps from flashlights, flares and street lights, z-prepass, tiled color buffers, light buffers for deferred rendering, vector blur, screen-space ambient occlusion, auto-exposure, HUD, video buffers, menus and so on. In the end all are combined to form one 720p image, with all intermediate buffer sizes selected to optimize image quality and GPU performance. All together the render targets take about 80 MB of memory, equivalent in size to over twenty 720p buffers."
Beyond3D appears to be somewhat confused as well. Most consider the opaque geometry framebuffer to be the "game resolution," which is 960x540 in the case of Alan Wake, but they do agree that there is more to Alan Wake than just that, which makes this entire situation sort of complicated... It isn't strictly 540p. But it isn't strictly 720p either.