Most broadcasts are in 720p because they use less bandwidth than 1080i. 1080i is true HD. 1080 lines is obviously higher than 720. The only difference is progressive scan versus interlaced scan. Most people prefer a 480p signal over a 480i signal. So in that case you would assume that progressive is better than interlaced. But when you increase the resolution the scan is less of a factor. Either way 720p or 1080i looks great on a nice display.
A DVD is 500 lines, I believe, double that of analog, 240 lines. Double the quality of a DVD and you get HDTV. No wonder it looks so good.