I ran a test. Downsizing a 1080P BluRay to 720P. (At very high bit rates)
I have 2 TVs here.
1st is a 46" LCD Panasonic.
The Second is a 60" LG Plasma.
Both have 1080P resolutions.
On the 46", the difference between 720P and 1080P material is barely noticeable.
What difference there is can really only be seen if closer to it.
(And even then you really have to look hard to se it)
However, on the 60" Plasma, I could really tell a difference.
Although not a huge difference, and the 720P material still looked very good, it was certainly sharper @ its native 1080P.
At least to my eyes.
However, this could also be due to the way the TVs interpret the material & upscale to 1080P.
So that may just be the TV itself, and not so much the resolution rendering my little "test" pointless.
Aslo the fact, neither is a native 720P so .....
It was a project to pass the time anyway
I do not play games on either so I can not comment on that part.