Excuse me for getting in the crossfire. All I have is an old 480i analog set, and I am looking into HDTV and VaVaV*. I am purely a lay person about this. But here's what I see, and please tell me objectively if I am missing something...
On the one hand, 720p is "better" in that it is rendered more cleanly with a single pass. On the other hand, 1080i is "better" in that it has more pixels of resolution, but takes two passes to refresh all those pixels.
So, the bottom line is that EITHER ONE could be better depending on what you are viewing. If you are viewing slow moving scenery on DHD, 1080i viewed on a 1080i native monitor will render a "better" picture because of the higher resolution than 720p. If you are viewing fast action, sports, or action movies, 720p viewed on a 720p native monitor will render a "better" picture because of the cleaner movement with it's single pass rendering.
Naturally, a native 1080i display is going to render native 1080i in all situations better than it will render converted 720p, and a native 720p display is going to render native 720p in all situations better than it will render converted 1080i.
Now, this is purely my guess based on what I have read. Am I close to understanding this correctly??