I have a 46" 1080P plasma and I can't honestly say i've ever seen a difference in resolution between a good 720P encode and the equivalent 1080P Blu Ray. Most current consoles games are 720P as well. To me the only thing I don't like about my Panasonic plasma is that the flesh tones are a bit on the red side, even calibrated. I don't think I would regret buying a cheaper 720P set.
I like the idea of not having to downscale 1080P but i really don't see the difference. Black Levels and color accuracy are what matters.
If the manufacturer saved money by having a fraction of the pixels and the same general image, so be it. Remember, a 720P TV has about a quarter of the total physical pixels of a 1080P TV.
Now a modern 54" 720P tv, does not make sense. You can see the difference between 720P and 1080P on such sets.
If you have 20/20 vision and sit more than about 10.53 feet away, you cannot see the difference between 720p and 1080p on a 54" TV. Distance from the screen is as important as screen size in deciding between 720p and 1080p.
In other words, with 2 otherwise identical TVs, it would be a waste to spend extra to get 1080p on such a TV at such a viewing distance. It is only worthwhile if one sits closer than 10.53 feet (or one has better than 20/20 vision).
In my case, I have a 768p 42" TV from which I sit at just over 8'. At that distance, with that size TV, 1080p would make no visible difference unless I had better than 20/20 vision. (To be more precise, for such a TV, it is 8.06 feet that is the distance that a person with 20/20 vision would have to be closer than to see a difference in resolution with a 1080p TV. For 720p, it would be 8.19 feet.)
See the links in my post above for a calculator for this:
http://forums.audioholics.com/forums/showpost.php?p=814853&postcount=5
The only reason for me to consider upgrading to 1080p would be if I wanted a larger TV or wanted to sit closer. Otherwise, it would be money for nothing, assuming that the TV is otherwise identical.
With your 46" TV, if you sat with your eyes closer than 8.97 feet, and if you have 20/20 vision, you could see the difference between 1080p and 720p. If you were just barely closer than that, you would barely see a difference, but you would see a significant difference at 6 feet.