720p is 720p - it is 1280 pixels by 720 pixels. How do you make that fit cleanly into 1024x768 pixels? The answer is you do a lot of math and hope the answer is really nice to look at. Fortunately, it is commonplace now to do this conversion so yes, it looks really nice from most manufacturers - including (especially?) Panasonic. But, the BEST possible way really to view 720p is with a display that is 1280x720 pixels exactly. A lot of DLP and LCD technology is exactly that resoultion, and they look awesome.
Anyway, re-read your owners manual and you may need to hook up your HD recevier to the PC input on your plasma. Check out a 720p broadcast, and also look at 1080i HDTV and 480i SDTV to see how it looks through the PC input. It really, REALLY sucks that your display does not support all ATSC standard formats across any component/HDMI input.