HD-DVD is 1080i
Blue-Ray is 1080p
That's why Sony advertises themselves as the only true HD Dvd.
And it's wrong. They are in fact 1080p stored; but only the newer HD-DVD units can send 1080p out. Once again though; that's relatively irrelevant assuming a competently built deinterlacer.
I haven't researched sales statistics, but most HD plasmas and HD LCD tv's to the average consumers are 720P at the popular price points. They all seem to jump on the advertising bandwagon though by saying they will display a 1080i or 1080p. Of course, they just downrez to 720p.
Any microdisplay has to either scale to the panel or show it in passthrough (pixel for pixel). That's not exactly new information. Even 1080p displays have to scale to fit their resolution.