I believe the Xbox has a 720p setting. That's what I'd use with a 720p TV set. However, it will be hard to notice the difference either way.I have a dumb TV question. He has a 720p set that accepts a 1080p signal, Toshiba Regza 37hl67.
Is there any extra conversion going on? Xbone auto set the display settings to 1080p. Working fine. Just not sure I should set it to 720p, which is what the tv is.
If the games and videos are rendered in 1080p, then it shouldn't matter much who is doing the down-conversion to 720p. Where it could matter is if the content is 720p to begin with. In such case you can probably avoid the double-conversion by setting the Xbox to 720p.
Try it both ways and see if you can spot any difference at all. My guess is that you won't!