Welcome to the forum. You had originally posted this in the News sub-forum, so I have moved it to the flat panel sub-forum.
dpi is a printer spec not a HDTV spec, but what you are asking is the differences between a 1080p HDTV and a 720p HDTV.
A 1080p HDTV will have a 1920w x 1080h pixel array and a true 720p HDTV will have a 1280w x 720h pixel array. Since those numbers are regardless of the size of the HDTV explains why dpi does not apply to HDTVs. The smaller the HDTV the greater the dpi would be.
Also the 720p class HDTVs are not all 1280x720p. Most plasmas and many LCDs are actually 1366x768p sets which would cause some uneven scaling to be done. That would be one reason for favoring the 1080p sets over a set that is actually 768p.
At 42" or smaller if you are primarily going to be watching video (as opposed to PC monitor use) the 720p or 768p sets would be fine even for Blu-ray. At 46" or larger I would go with a 1080p set. Now if you are going to attach a PC in the future then a 1080p set is the way to go. Burn in could happen on a plasma attached to a PC, so LCD would be a better choice for hooking up a PC.
Also on the LCD vs plasma issue. One thing that tends to be glossed over by most things you read on the net is the reflectiveness of the plasmas. In rooms that are bright enough to read in with light colored walls or windows, the superior blacks of the plasma will be almost totally destroyed due to the reflections. For some examples see: Plasma Glare