Nick, remember that a 1080P set shows 1080x1920 pixels, so over 2 million pixels. A 768x1024 set shows 786,432 pixels...so less than half of the 1080p set. So the pixels would have to be twice as large on the 720 set than the 1080 set and that is why you have to sit farther away.
If you buy a 720 set and the input is 1080i broadcast standard, the videoprocessor will convert the 1080i down and show it at 720p.
If you buy a 1080p set and the input is 1080i, the videoprocessor will hold half of that interlaced signal(540P lines) for a split second and show them all at the same time as 1080 progressive.
The processing of merely holding 540 lines for a split second is very easy, which is why I never listen to the pimply faced salespeople at BM stores that say "1080p is a waste because there is no 1080P signal being broadcast".
The fact is that you can sit closer to a larger TV that is 1080P than you can with the same size TV that is 720P.
