Collider have a pretty interesting article interview with Pixar director Jim Morris regarding re-rendering Toy Story for 3D.

Next year, Disney will re-release Pixar's 1995 classic to 3D theatres, in preparation for the release of Toy Story 3 in 2010. However, it seems that technology bottlenecks back in the day meant the film could only be rendered in 720p. So not only do Pixar have to re-jig the original files for 3D, they also need to re-render the film at a much higher resolution (most likely 4K resolution), so hopefully we will have Toy Story looking great in 1080p for the eventual Blu-ray release.