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There was a very good chart I saw a while back that showed the distance at which an individual (with 20/20 vision) must be within to notice the difference between 480, 720 and 1080 lines of resolution compared to the relative size of the screen (say from 20" to 120"). There is a definite diagonal scale.

Whether an individual with 20/20 vision can notice the difference between various resolutions depends entirely upon both size of the display and the viewing distance.

Sit back far enough from a give display size, say 50 feet from a 20" display as an extreme example, and you won't be able to tell the difference between even a sub SD (ex. 480x320) picture scaled out to fit the entire display, and a native 1080p signal, even assuming the display is a native 1080p display (like a computer monitor, rather than a flat screen TV).

Stand close enough that same 20" screen (computer monitor viewing distances for example), and you can easily discern the difference between a 480p upscaled picture and a 1080p native picture.

Read text on a monitor at various resolution settings at various distances to see the difference it can make on the same size display.

The difference becomes more distinct, the larger the display.

More pixels from both the video source, as well as the max native resolution of the display will ALWAYS mean more detail can be rendered. There is no way of interpolating data to cheat this. As is the case with resizing a 720x480 image in Photoshop to a 1920x1080 image, new data cannot be "made" only interpolated to the nearest adjacent approximation.

But if an individual really can't tell, or has a hard time telling the difference, then there really isn't much reason to be paying a premium for HD media, and there's no point in even asking the question.

And as it's been mentioned, there is a pretty wide gamut of quality for HD media, depending upon the master source and whether the master was cleaned up before transfer, in addition to several other factors.

Put simply, some of the worst HD media transfers barely look better than a well mastered DVD. Given a poor enough source, an HD transfer could actually look worse than a cleaned up DVD transfer.

So if the premium price is an issue, either wait for your favorite movies to go on sale, or check with the HD media review sites to see if the transfer really is worth the extra money.

Also, there are plenty of titles that really don't need to seen in HD, unless you're simply trying to add to your HD collection, for whatever reason.