When connecting a television that accepts video signals of 480i, 480p, 720p, and 1080i, is fed a signal from a Sony PS3 playing a Blu-ray DVD, it is my understanding that the best option is to set the PS3 to 720p output because this would mitigate the number of conversions (interlacing/deinterlacing/scaling/etc.) taking place before the video signal actually appears on the television screen for viewing (or would it be better to set the PS3 so that it automatically determines the appropriate signal?).
Given that the PS3, as well as the more capable upconverting DVD players (such as the Oppos and Denons with Faroudja chipsets) are capable of upconverting standard (480p/i?) DVDs to 1080i/720p, which will then be played on the plasma screen in 720p, is there any advantage to using a Blu-ray DVD with TVs that only display 720p? Would the quality not essentially be the same if both are being played in 720p? Perhaps the Blu-ray will deliver superior audio through the AV receiver (which could be reason enough to go with the Blu-ray DVD) but as far as the video, would there be any difference?
How about with an LCD TV instead of plasma; that shouldn't make a difference should it?