I use 1080i here as thats the max my screen will do and the image is beautiful.
I'm using HDMI PC on my TV to display the imagine, my TV supports this via it's remote control (LG Screen). I find HDMI DTV which most people use looks more like an upscaled image, a mass of colour and being over bright. My screen is 1360x768.
Here is one of the better photo's I have taken of my screen.
Pic:
http://i55.tinypic.com/33xzytt.jpgTry 720p, 1080i ect and see if you can change your TV to display HDMI PC aswell as HDMI DTV. I know my photo is not the perfect answer but it's just to give you a small insight to what I'm looking at so you can compare.