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There are two types of video signals: progressive (designated by the letter "p" following the number); and interlaced (designated by the letter "i" following the number). Progressive video draws each line in order; in the example screen above it would go 1-2-3-4-5-6-7-8-9-0. Interlaced video skips every other line; in the example screen above it would go 1-3-5-7-9-2-4-6-8-0.
Traditional television signals have been interlaced; most (if not all) computer monitors are progressive. Text is harder to read on an interlaced monitor, which is why news broadcasts and such tend to use large fonts when displaying text.
The number at the beginning refers to the total lines of resolution. There are three options available to HD signals: 480, 720, and 1080. So combined with progressive/interlaced, there are (theoretically) six types of HD signals: 480i/480p/720i/720p/1080i/1080p.
As far as comparisons go, I've heard that 1080i offers more detail, but 720p offers a cleaner image. 1080i is more common as well, since it is cheaper to provide than 720p. Regardless, you'll find fans of both, since it is a matter of taste. (Personally, I prefer 720p, but that's subject to change once the 360 launches.)
MS is requiring all developers to support native 720p signals -- all other signals are up to the developers. So if you're looking at purchasing a new HD set, you probably want to make sure it can handle 720p natively, as this will be the only guaranteed common signal among all Xbox 360 games.
Hope this helps...
