He might be right. It surprises me but when I do searches I get a lot of sources ttaht say that the DDS are 1080p but the player outputs at 1080i
Here is one
http://www.digital-digest.com/highdefdvd/faq.html#faq406
"4.6 What resolution will the video on a movie HD DVD be?
HD DVD resolution will follow the standard HD resolution standards currently used for HDTV transmissions. This means, at least for the present, the maximum output resolution will be 1080i (see below for updated information on this issue), or 1920x1080 in interlaced format only (not many displays can support 1080p, and even less can resolve or display the full 1080 lines - more information in section A.2). There is also 720p resolution (1280x720, progressive), which is the current native resolution of many home theatre displays, and also SD resolution support, similar to today's DVDs.
The lack of 1080p support was something that even supporters of HD DVD are complaining about. At the time movies were to be stored in 1080i format, even if 1080p output in players were planned to be supported in the future - requiring a bit of de-interlacing to produce a progressive picture, as opposed to BD's progressive source.
But the situation has since changed. In an interview with Microsoft in the Audioholics magazine in January 2006 indicated that HD DVD movies will be stored in 1080p format like BD, even if initial players can only output at 1080i. You can read the full interview here.
So far, all of the HD DVD movie releases have been in 1080p as promised. One of the reason for the lack of 1080p HD DVD players seemed to have been the lack of HDMI 1.3 specifications at the time of launch (the interview above seems to refer to this as well). This does not seem to be true as 1080p is supported by all version of HDMI (Dolby and DTS's lossless audio, on the other hand, is only supported by HDMI 1.3). The reasons for the lack of 1080p HD DVD hardware is that the Broadcom chip used is limited to 1080i output. In fact, Samsung's first Blu-ray player also uses the same chip and then uses another chip to de-interlace the 1080i signal produced by the Broadcom chip to 1080p.
The actual quality difference between 1080i and 1080p is actually an active debate, since it has to take into account various factors such as the source material, the native resolution of the display, and even the de-interlacer. For more information, please refer to section A.2."
then again I see sources that say that both PLAYERS are 1080p. I am not sure at all now.