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I do care about native 1080p. No matter how much AA you throw at a 720p picture, a 1920x1080 picture will always look better on a 1920x1080 panel with dot by dot precision.
It didn't used to matter as much when we were still using CRT's, but lcd panels just look better at their native resolution. If you play on a plasma tv then chances are the resolution is 1366x768, even though the tv supports 1080p it will be downscaled. Then a 720p game with AA will look better then a 1080p game without. The same ofcourse for an lcd/plasma tv with 1280x720 native resolution.
On a 1920x1080 screen over 52 inches, yes 1080p matters. The pixeljunk series looks amazing, same for Wipeout HD. The extra vertical resolution does a lot too for GT5. Going back to NFS shift after GT5 you quickly realize that it's a lot harder to judge speed and corners.
The current hardware can't do it all at once, NFS hot pursuit visuals in 1920x1080 60fps with no tearing, maybe next gen.
Anyway I just got to see the extended ending movie in GT5 after finishing the extreme series, on a 92inch 1920x1080 screen. We still have a long way to go before you can call anything in motion photo realistic. Here's a link to a 720p version (with crappy compression unfortunately). It pales in comparison to watching it in blu-ray quality but you get the idea, I'm ready for next gen.
The ending starts at 26 minutes in the video, first person drive of Nordschleife.
