Lets' do some knowledgeable thinking, alright??
If the Xbox 360 outputs games in 720p, and your TV does 720p, what resolution will your games be dispayed as? Well, first of all, you can change what resolution your tv is displaying (so if you want to view a 720p resolution in 1080i, you can do so). Second of all, since the games are in 720p, you will obviously put your tv into 720p.
Dvd's are 480i and 480p. Your tv will be in it's native resolution (720p) and display the 480p image, so you are fine.
God, I wonder how people could drop thousands of dollars on this technology and have no clue how to use it. It's like me buying an airplane but not knowing how to pilot it.
Good call.