Okay... Here we go.
All fixed pixel display devices are progressive. This means that a 1365x768 display (many plasmas) are 768p. Your computer LCD monitor may be over 1920x1200 - progressive. Alright, most people get that and you can ask, or search the forums, if you don't get it.
Now here is the kicker: HDTV is defined (poorly I might add) by the ATSC standards to include ONLY: 1080i and 720p. Any television that is ATSC compliant must be able to handle: 1080i, 720p, 480p, and 480i.
What is missing? Well - 1080p!
So, while a set... let's say the BRAND NEW Sharp 1920x1080 (1080p) LCD flat panel display everyone can go look at one at Best Buy, is a 1080p device, the processors on board this projector do not accept 1080p.
There is a new projector from Sony (or Barco?) that is also 1920x1080 that does not accept 1080p into it. While many computer video cards can output 1080p, nothing else that exists currently in production can.
So, for whatever reason, manufacturers don't build video processors into their equipment that accept 1080p native content. So, if your PC outputs 1080p directly to the new Sharp or to a 1080p DLP, it is not necessarily going to pass that video through the processor to the screen.
I have NO IDEA WHY! Really, don't ask me why it won't accept it. I know the newest top dollar Sanyo wide screen 1920x1080 projector DOES accept 1080p native material. But, it is simply not something manufacturers think is required of their products yet.
Now, does that mean that the new DLP projectors won't display 1080p?
No! The chip is 1920x1080 pixels... So ALL the projector will ever (EVER!) display is 1080p. It just means that you won't necessarily be able to feed the projector 1080p. Fixed pixel displays are not what goes in, comes out the same devices. They are - what goes in, then it gets processed to fit on the number of pixels that the display has, then it is put on the display devices. This is the same reason people see that a plasma is EDTV (480p) and go "No, I want HDTV." completely clueless that the plasma they looked at will accept all ATSC standard inputs.
OR - In summary:
The output resolution of a display has nothing to do with what it accepts or is required to accept on the input side and a display to be badged HDTV or ATSC compliant has no need to accept an input of 1080p. So, if you see a new DLP with the new chip, and 1080p is important to you (it should be with BD on the way!) then don't assume that the TV can handle 1080p on the input.