Go with the 1080 that is going to be your "True" HD tv, quality wise the 720 would be 2/3 as good and a normal crt tv would be 1/2 as good. As a point of reference, a common DVD has a resolution of 720, a VHS tape 480 (i think).
There is two different kinds of 1080, "i" and "p". This has to do with how the screen refreshes. Basically i refreshes every other line, so the even # of lines flash, then the odd ones, With P they all refresh at once.
Right now no one broadcasts in 1080p. But stuff like hd dvd and blue ray is 1080p capable depending on your setup. Pretty much everyone is now selling 1080p but if you can find a 1080i they will be economically priced.
maybe I should read better,
I'd do both, the common input with cable is for a CRT tv. With the right cables, HDMI, the 1080 will look good.