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selnor said:
Halo 3 runs at a lower resolution, not only to maintain a constant frame rate, but because it runs TWO frame buffers, that cover both the high dynamic range, and the low dynamic range. Hence why Halo 3 is possibly the most colourful game in a long time.

80 vertical pixels is a worthy sacrifice to not have a game that looks bland like Gears of Grey, and to have a steady frame rate during some of the larger battles (at one point in the game, there are 2 scarabs, about 8 ghosts, 20-ish brutes and grunts, 10 or 15 marines, and a buttload of aircraft having dog fights in the air. All in an area that is probably about 1/2 mile wide)
I am guessing that is the reason, it was probably possible to run the game at 720p and in fact without much difference, but bungie decided that the little extra framerate and dual lighting renders where worth it. So far I agree.