The rigth answer to your question is: YES and NO.

To answer it you need to know the distance to the screen and the size of that screen. Like this:

I plugged my PC on my 43" HD Plasma TV and it's now leagues better than before when I was using a 32" LED Full HD. So, from where I play, I can't see the pixels.

Yes, absolutely. I have a projector, the image is about 75" and is 2m away from me so...

Yes, 720P has a blurry feel to it. In all honesty though I don't really care, I can game perfectly fine on either.

My TV is like 36 inches. You can put the rest together.

Not really, my tv isnt big enough so i cant see anything better than my screen.

Also im becoming a little short sighted so distant things get a little blurry.

Yes. But I don't care too much.

yes.
but after playing for 5 mins is completly irrelevant.

I can, but I don't mind 720p that much.

I think everyone can, unless of course they are just lying.

Simple test, open YouTube on your PC. set the video quality to 360p, make it full screen then set the video quality to 480p and make that full screen. Then try 720p, I'm sure anyone will be able to yell the difference with increased resolution.

Yeah, but this is about the difference between 720p and 1080p - I just did that exercise on YouTube and couldn't really notice any difference. The optimal viewing distance graph haqquaton posted makes a lot of sense, though.