I have a high def plasma and DVD. I choose to use 720p over 1080i because it seems better to my eye. Motion is better represented by a progressive signal which is what most television is all about.
http://www.afterdawn.com/glossary/terms/progressive.cfm
http://www.cnet.com/4520-7874_1-5107912-1.html
720p - 720 progressive. One of two currently used formats designated as high-definition television in the ATSC DTV standard, this technology comprises 720 vertical pixels and 1,280 horizontal pixels. The p stands for progressive, as opposed to interlaced, scanning, which is used in the other accepted HDTV standard, known as 1080i. Contrary to myth, 720p is not inferior to 1080i; 720p has fewer lines but also has the advantages of progressive scanning and a constant vertical resolution of 720 lines, making it better able to handle motion.
1080i - 1080 interlaced; one of two formats designated as high-definition television in the ATSC DTV standard, with 1,080 vertical pixels by 1,920 horizontal pixels. The i stands for interlaced, as opposed to progressive scanning, used in the second HDTV standard, 720p. Contrary to myth, 1080i is not superior to 720p; 1080i has more scanning lines but also suffers the disadvantages of interlaced scanning.