Sorry, I missed the bit about "native" resolution.
Your tv has a resolution of 720x1280. All 720p tvs have this, and thus 720p is the native resolution (although some newer 720p tvs, notably plasmas, have a resolution of 768x1366). 1080p tvs have a resolution of 1080x1920.
1080i works on a 720x1280 screen because, as I explained early, they only refresh every other line of the screen 60 times a second compared to every line simultaneously on a progressive set. As such, they can fit 1080 lines of resolution in a 720 screen, because not all are present at once. They alternate.







