I see lots of confusion here about resolution versus Here's a great thread which will either help you or creat even more confusion!
http://www.highdefforum.com/showthread.php?t=33372
The key issues are, using perfect equipment which none of us have:
1)1080i broadcasts have better resolution than 720p so they contain more detail. If you had a completely static picture then 1080i would look better.
2) 720p broadcasts can look better than 1080i for fast motion because even though they have less resolution, because they display the lines sequentially the detail in each line matches up better then 1080i because the information in the 1080i lines that are next to each other (vertically) is generated at very slightly different times.
3)There won't be any 1080p content from any of the broadcast providers (OTA, DirecTV etc) in the near future. Even maybe the far future, who knows.
4) HiDef DVD is capable of providing 1080p, as is the PS3.
5) 1080i movies will become true 1080p if the 1080pTV has good deinterlacing and 3:2 pulldown processing, because they are 24fps.
6) 1080p Tvs processing 720p signals will have to upconvert which means they "guess" what's in the missing lines; obviously this degrades the picture somewhat
7) 1080p TVs processing non-movie 1080i content have to deinterlace which for fast motion can create artifacts.
And to complicate it all, the equipment we use is not perfect and the errors that the equipment introduces can make this whole analysis almost irrelevant.
In reality, a 1080p TV fed with a 1080p signal (hidef DVD, or PS3) should give the best picture. A 1080p TV with good interlacing and 3:2 pulldown should give the best picture when fed with a clean 1080i signal from a movie shot in film. A 1080p TV when fed with either a 720p or a 1080i non-film signal should give great results but it isn't true 1080p, and for non-movie content whether 720p or 1080i will be best depends on the source and on the capabilities of the specific TV. The biggest advantage is probably that there are more pixels so you can have a larger screen (or sit closer) without noticing the pixel structure.