Yes, most HDTV's upconvert everything to 1080i, with the exception of output from a progressive scan DVD player, which the TV will display 480P.

The only displays that I know of on the market which can show native 720p are a couple of Plasma and one early HDTV rear projection display from Panasonic.

In my case, my set top box(Dish Network 6000) is doing the upconverting to 1080i from 720p. My Home Theater PC also upconverts to 1080i, including DVD playback, which looks spectacular by the way.

From what I heard 1080p will become that standard in the future, basically your display will upcovert everything to 1080p.