People told me that they can't notice the difference between 720p and 1080p, and somehow I believe them because both resolutions looks great, but if you are like me: "why buying a 1080p if I'm gonna be using 720p only" then you can try to get your stuff working the way it should.
I have a samsung 50" plasma, is 720p/1080i and I always use 1080i (when available) since the interlace seems to help the sharpness of the image, to me I do notice the difference, and also notice when I watch a true 1080p from another tv and compare it to my 1080i tv, but you have to really pay attention to the details and if you are relatively close to a +50" TV you can surely notice.
It's like the new 120hz! my family says they don't see any difference, but hell there's a huge difference for me!!! I can stare and drool at the store with this image at 1080p with 120hz, but well that's another subject.
my humble opinion is to you get your stuff working the way you want until you are happy with it, at the end that's why we buy entertainment devices.