vip 722 won't show 1080p as tv type

Because it doesn't know how to do that. Dish only has VOD in 1080P and if you want to order it in 1080P the 722 will look to see if that is possible and if it is not it will not let you order it.
 
In setup when connected to a full HD TV. Why is that?

Because, with the exception of VOD, there is no 1080p that is broadcast from networks or cable channels. Mostly all 1080i with the exception of ABC/ESPN and Fox (720p).
 

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