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It depends on what you're watching. Interlaced differs from progressive in that it alternately refreshes every other line of the screen rather than refreshing them all at once. 1080i has better picture clarity than 720p, however, it has ever so slight ghosting because the image doesn't refresh at as fast of a pace (overall). Therefore, static images, or images with little movement therein, will be better suited to 1080i, as you'll get the better image clarity without the ghosting. However, rapidly moving images (FPS, movies like Black Hawk Down, etc.) will probably look better in 720p.

Ultimately, it depends on what you yourself prefer. The ghosting (or the higher resolution) may be completely unnoticeable to you.