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Resolutions are different from HDTV specs.

720p is the lowest number of lines on the TV. That's up and down.
720 lines up and down on the TV.
1080p is 1080 lines up and down on the TV.

On my 360 when it's connected to a HDTV you get the options of
480p
720p
1080i
1080p

When my 360 is on my Pc Monitor theres like 12 different Resolution options.
from 640x480 - 1800x1024.

Dont think of it as 720p must be this res. It doesnt work like that. Well at least with the 360. When it detects a monitor the 360 displays like a pc.