In addition to resolution, performance issues come into play for programmers. It is a matter of deciding how well a game will perform at 720p vs 1080p. If the same number of poly models can be rendered with no performance loss, then 1080p will certainly be better. But if the number of poly models being rendered at 1080p must be decreased to maintain performance of the game, then 720p may in fact "look" better.
Also, according to http://www.smpte.org/home other issues are perceived to be more important than resolution, like Contrast Ratio/Dynamic Range, Color Saturation, and Colorimetry/Color Temperature or Grayscale
its a shame really because you get your new snazzy 1080p LCD TV and in reality it is only blu-ray films that take advantage on it and HD channels if you can call them that anyways... especially in the uk. which are just 720p