The latest great thing in home theater displays is the emergence of 1080p resolution displays. p stands for progressive, which means the screen fills all at once at 1/60th of a second, versus i for interlaced, which means every other line, then the other half of the full picture, each field displaying at 1/30th of a second.

At this time, there is no source for broadcast 1080p programming. Instead, we have 1080i: two interlaced fields make a frame, at 1/30th second for each field.

Finger it out!

Take your fingers and spread them apart. That's a crude example of interlaced. When you bring the hands together, you combine both fields and you get the whole picture (one frame). It happens fast enough that you don't notice the effect unless there's motion on the screen, then you might see a difference in the smoothness of the motion.

Progressive is all the fingers at once. 720p is fewer pixels, faster: 1/60th second per frame.

1080 = 1920 x 1080 pixels | 720 = 1280 x 720 pixels

Till recently, HDTVs were either 720p or 1080i. Most TV transmissions were 1080i. I believe ABC adopted 720p because it would have shown sports with better pictures. I also remember back when Panasonic Broadcast underwrote ABC (as 720p) - or at least Monday Night Football. Fox and ESPN now also do 720P. The others are 1080i.

The new 1080p sets don't have the front end circuitry to actually receive that resolution. But, again, nothing is transmitting that res anyway. What the advantage is, is how these sets show 1080i - they have the pixel count to do it without trouble. They deinterlace the transmission and present it full frame without throwing away any detail. A 720p set has to downconvert a 1080i signal. In that downconversion you can lose some detail.

(BUT) OH SAY CAN YOU SEE?

But there's a more important issue - can you really see the difference in resolution between 1080i and 1080p? Tests of visual acuity to determine the resolution required of a television transmission system by the BBC's J.O. Drewery and R. Salmon determined that at 9 feet, a 50 inch screen at 720p's resolution will give you all the resolution you can see! At 9 feet, a 56 incher needs 1080i to avoid seeing the pixel structure.
If you sit farther or closer, you may need more resolution.

1080i vs 720p: MOTION CHANGES EVERYTHING

Motion is different issue. If you want to see motion clearly, then live action 720p is what looks best, compared to 1080i. Here's why: the information content of 720p is about the same as 1080i, though what it lacks in spatial resolution, it makes up for in temporal resolution (because the picture is at 1/60th of a second, not 1/30th x 2.) On 1080i, this would show as flickered or jagged edges on bright horizontal objects (like in the background of a camera pan.)

The good news? As the retailers hawk 1080p, you might find a killer deal on a 720p set and not give up anything in what I'll call 'effective' picture quality to get it.