I have heard a lot of people say that on screens about 42" and below nobody can tell the difference between 1080p and 720p. I've never done any comparisons myself, but I don't see any reason to disbelieve this. On the other hand, though, I've read a lot of reviews and such in which people people say that standard definition TV looks terrible on a 1080p screen compared to a 720p screen. One part of my brain immediately starts putting things together and goes into skeptical mode. I say, "Wait . . . if I can't tell the difference between 720p and 1080p on a 42" screen, why does this stuff look terrible on one, but passable on the other?"
I've come up a plausible answer for that, in that it must be excessive artifacting and ---Cleveland steamer--- that's introduced when the signal's resolution is upconverted that high, whereas there's much less data to add in order to upconvert only to 720p --- thus, 720p ends up with a superior picture.
Unfortunately, this begs another question. Why, then, do DVDs look so great when upconverted to 1080p? Can someone help me understand what I'm missing here?
It's real simple actually, and it's stuff we know from mame.
A ntsc signal, even one from your cable provider is analog. That means colors and such aren't uniform even if they are supposed to be and there's a ton of noise on all but the cleanest of dgital cable/sat signals. Even assuming it's 100% clear and untouched, it's still conveted to analog so it can connect to your tv and it gets ruined anyway. In other words, much like old-school web graphics, the image is dithered. Take a 256 gif and upscale it and it looks terrible, but take an image the exact same resolution, only a bitmap or a 24 bit jpeg and it looks pasable, mainly because all the color information is there and the image editor can put a nice blur on it and smooth things out. A hd set has great precision in color and sharpness, so any of these minor flaws on a sd signal, that would normally just not be significant enough to show up on a analog tv shows up like a target on a digital display. Also remember that unless you have a fancy hdmi-enabed cable box, there's no upconversion and thus nothing is filtered.
Think of spyhunter in mame, with the filters turned off on a lcd monitor. Looks like crap doesn't it? The road is speckeled with dots and everything is blocky. Well the source used dithering to make the road and the superior precision and color range of a lcd monitor removes this natural blending. It's basically the same deal.
Now dvd's are totally different. First off it's a pure digital signal and your have component out or better, meaning even though it's converted to analog, the source is purely digital and your monitor gets sent a greater color range with a sharper contrast. Up-converting does quite well with this type of source material as well, because again, the image is un-dithered and there is more color information to work with. Going back to our jpeg example... ever notice how a 800x600 wallpaper still looks ok on a 1024x768 screen? Well it's the same exact image color-wise, only some detail is lost between a 1024x768 version of the same image so scaling it only blurrs the sharpness a tad.
I can tell you right now, you CAN tell the diff between 720p and 1080p, I think it's just that there is so little true 1080p video out there people don't realize they've probably never seen it before. First off, unless you are using hdmi then you can't get a 1080p signal, rather you get 1080i, which is only just a shade larger than 720p in the vertical, which is the part of a digital image we can notice artifacts in the most. Secondly, I'm not aware of ANY hd broadcasts that use 1080p. Sure some broadcast it out at that size, but either the cable box degrades it back to 1080i, the source material was only filmed in 720p, or the signal is compressed (think divx rips) to get it down the line. Streaming 1080p to the 360 or teh ps3's blueray player is about the only way I know to watch real 1080p at this point, and that includes hd-dvd and blueray players as even though they are currently expensive, they are also currently very crappy when it comes to decoding the discs.
With that being said, the same pure or almost pure digital connections, the same high quality color values and the same display hardware is used for both 720p and 1080p media so there isn't THAT much difference. On your pc, aside from a larger desktop space of course, can you really tell THAT much difference between a computer running a pc game at 1024x768 and one running it and 1280?
So to sum up, a sd ntsc signal looks crappy not because of it's poor resolution, but it's poor quality. If it were a pure digital signal coming out a higher end connector then it'd look fine, which is essentially why dvds look ok since they are glorified ntsc without all the crap.
Hope that helps!