Re: 720P vs 1080i?
This could take a while to answer.
Our ATSC standard has 18 different broadcast formats when you factor resolution, aspect ratio and frame rate. For sake of brevity you can narrow it down to these 5 resolutions:
480i, 480p, 720p 1080i and 1080p/24fps
Why does ATSC have so many resolutions and frame rates? Bureaucracy, with so many cooks in the kitchen (computer companies wanted 480p so that the extra spectrum could be used for data casting. TV manufacturers wanted 1080i since at the time TV's could be easily converted to this standard) the decision was made to offer all the formats and let the broadcasters decide.
In theory, the idea was to use 480i/p broadcasts to allow multicasting of 4 channels on 1 channels spectrum. This would allow a broadcaster to collect extra ad revenue. When primetime hours begin, they could switch to HDTV and shut off the multicasting.
As to the 720p vs. 1080i debate, it is stupid and pointless. If you own a TV that is 1080i/p then a 1080i broadcast will look better than a 720p broadcast. If you own a 720p TV then a 720p broadcast is preferable.
Both 720p and 1080i have their pluses and minuses: 1080i will have a definite perceived resolution advantage while 720p will handle the movement of text on the screen better (and motion in general). But none of this matters because there are no TV's that are multi-scan and can support the native resolution of both formats (some front projectors can do this but are supper spendy). Since this display doesn't exist, we cannot do a fair comparison of the formats. I feel that you would need a display that is larger than 90" while sitting 14 feet away to see a difference anyways.
In the end, if broadcasters were to switch to 1080p/24 then this would be the best for resolution but then you have the juddery look of 24 frames per second. 1080p 60 would be the best but we do not have an approved ATSC broadcast for this resolution.
I am afraid that this most likely created more questions than it answered but hey, I took my shot.