It really isn't a TV issue as much of it being a production issue, like how the content was originally captured. When content is captured in a 525 line model or something similar and then is expanded to a 1080 or 720 line environment you have loss of detail, clarity, sharpness, etc.
While there is a difference between progressive and interlaced scan, I don’t really believe it would make much difference on an analog image.
From what I've experienced with HDTVs, defects are more noticeable as the screen size gets bigger. Also, I find that CRT tube televisions display analog much better than a flat panel LCD or plasma set. Rear projections would be in the middle of that group.
My reasoning is that televisions like LCD and plasma determine images by pixels. This is another way to break down an image and show defects. Even with HD, I find that LCD has some issues with diagonal lines and curved edges.
I wouldn't stress over 720p or 1080i because they are very similar in picture quality and it would be difficult to distinguish one from the other in a stand alone environment. You would likely need to see them side by side to tell a difference.
When buying a HDTV I would really put an emphasis on various things like comb filters, contrast ratio, response time (with LCD), and the picture enhancement technology that many televisions have. This is something that will improve an analog video slightly, which will make it easier to view.
Also, if your budget allows then you might want to look at the 120hz televisions. These are also called high-speed televisions and they basically take a frame and produce the frame 4 times compared to 2 times on a 60hz television. This increased video processing speed makes for a better picture with any video.
