Almost all broadcast television is shot at 1080i or 720p. Major sports networks (ESPN) typically shoot and broadcast at 720p.
Now, as you may have gathered from the previous posts, what the cable companies do with those signals after they get it may completely destroy the quality of the signal. Typically, this comes in the form of significant additional compression to the signal. The key here being that just because something says it is 1080i, it may not be the same quality 1080i as was originally created, and the original may not even have been 1080i.
Let's throw a couple more things into this:
Cable boxes suck at scaling and may provide a lousy image at 1080i or 720p - or both - at all times.
Televisions may provide better scaling than they do deinterlacing, so some TVs handle a 1080i image better than they do a 720p image, or vice-versa. It depends on the manufacturer of the TV, and the model/year of the TV you own.
SOLUTION!
The best way to find out if 720p looks better than 1080i on your setup is really, really, really easy...
TRY IT!
While it's good to ask us what you will like better, it's much better to just change the settings of your cable box and try both settings for a few hours/days and see which one you prefer.
In my experience, I usually leave everything on 1080i and it seems to be satisfactory with my HD viewing.