As I understand it (but I could be wrong), there is no "right" answer.
Different networks broadcast HD in either 720p or 1080i.
Ideally, you want as little de-interlacing or scaling as possible.
Meaning, if you have a 720p display, then the best setup is a 720p broadcast, into set-top box at 720p, out to display at 720p. ie NO scaling or interlacing needs to be done.
Problem is, not all networks broadcast in the same format.
The question then is, what has the better processor, your set top box or your display? Let whatever is better do the work of converting the picture to your displays "native" resolution.
I have wrestled with this problem with my front pj and finally came to the conclusion. It probably doesnt matter much, just pick one and enjoy the movie!
Also, technically, 1080i is more lines of resolution than 720p, even counting 720p as double to factor in progressive scan.