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On my old 40'' FullHD LCD TV I see no difference between 720p and 1080p sitting 3.5-4 meters from TV.
On my old 22'' 1680x1050 LCD monitor I see the difference even between 1680x1050 and 1280x800 sitting in 1 meter.
On my new 55" FHD LED LCD TV I found that the difference between 1080p and 720p is sooo HUUGE! Sitting 3-3.5 meters away from TV.
Of course, PS4 and XO both have own cons and pros, but if you ask to choose between 1080p and 720p, I will choose the first no doubt.