Games at 1080i look pants on my LG 37" HDTV. The reason for this is that - although it can handle 1080i/p signalling - the number of physical pixels is only a little over 720p (1366x768 I believe). I think that this is the case for all 720p spec HDTV's that report they can display 1080i.
Unless you're lucky enough to own a full HD set (1080p), then you will be wasting your time trying to run games at the said resolution. 1080i causes unnessecary flicker, and if the screen has a high refresh rate, you will not see the 'extra' detail anyway.
My gripe is that when I set up my tv for the first time, my PS3 detected it, and automatically recommended 1080i as the setting. I think this is an oversight on Sonys part, as the resoution doesnt do the PS3 justice when the TV can't really display it.