Is this just conjecture or have you actually seen it and have an issue? The reality is, even at 1080i/720p it already looks pretty darn good. I think most people would have a hard time seeing a meaningful difference between 720p and 1080p.
Well, it's fact, but I don't have a 1080p display to really play with. I have seen 1080p delivered at 1080p and I have definitely seen interlacing artifacts, scaling issues, and timing issues. Some of it is through work as I've done $$$ residential stuff and had some opportunity to play with some really nice gear. Other stuff is through commercial work.
Mostly though I try to demo gear as much as possible and go to local high end stores and play with their gear. Looking at a Sony Qualia being fed 1080p on a 100" screen it's clear to see the advantage that 1080p can deliver, but color and contrast are FAR more important than resolution. I would also put image processing above resolution as a critical point.
But, when putting it all together into a single package then you may want everything for the money you spend. Great color, great processing, great contrast, high resolution, and sources that match up perfectly so you don't get judder effects, stair-stepping, or visible pixelation.
I have a 1080p projector that I'm installing in a couple of weeks that I likely will spend 5-10 hours playing with connected via HDMI to a PS3 as well as to a standard DVD player. It will have a 106" diagonal screen... I'll let you know what I think when I'm done.