Well, having a low-end PC, I have to make this trade off all the time. I usually put all my settings to High first and then adjust the resolution accordingly to get the desired frame-rates.
Besides, Im not sure if it is because I have a relatively small monitor (22") but I can barely notice any difference between 720p and 1080p. I assume that the bigger the monitor, the more noticeable the difference would be.
And now an example:
Recently I have been playing Portal at 1080P, everything Ultra High and 8x AA. And Doom at 720p with Medium settings and no anti-aliasing.
And Doom looks a lot better in my opinion. So yeah, I prefer graphics over resolution.







