For the Panasonic plasma panels, it appeared a common result after the test to allow the viewing of the movie but the picture is only 3/4 of the screen size and on the top left corner.
Based on Smith P's explanation, after the test on the Panny panels, the 722s decide to send out a 1250i/50Hz HD signal (the European standard). To correct it, go to "menu-6-8" to switch your 722 HD output out of 1080i, then back into 1080i, that will set the 722 output to the correct 1080i/60Hz rather 1250i/50Hz.
I don't know about the newest Panny plasma panels, but most we have do not support 1080p/24, so the test should have failed but apparently the 722 test result is different than when the Sony sets were tested, on the Panny's the test passed, but a wrong signal was sent out.
After correcting the 1080i output as decribed above, what you will be getting will be a 1080i/60Hz HD signal (not 1080p/24), if your Panny is a 1080p set, it will scale the signal to 1080p, and do a 3:2 pull down (if the set has such function) to reduce the judder.
At least that is what I think it is. No the resolution will not be lost at all, if your set can display 1920/1080, regardless if it is 1080i or 1080p, you get the same resolution.
The benefit of the E* HD VOD (and I think D* will be the same) is there is no longer the issue of over compressing the signals, whatever the files the studios send to E* or D* will be downloaded as is, so yes the quality will be entirely up to how good the studios provide to E* and D*. If it is the same quality as the Bluray disk, it will be.
For those that have 1080p panels but can not pass the test, simply order the 1080i HD VODs, the quality will be the same, as many had pointed out, if your set does not accepte 1080p/24, you can't get benefit of it anyway. But getting the 1080i version will not reduce the quality at all.