The first thing I should mention is that no DVD supports anything higher than 480p. So you won't be able to burn HD. Once the Blu-Ray Mac Pros come out, that will be a different story. But for now, we're stuck with Standard Definition.
Shooting in HD will (in most cases) still produce a higher
quality image, even when downrez'ed to 480p. And in order to do this, you'll need an HD camera (which I'm assuming you have). On to the resolution differences.
720p is argumed by many to be a superior resolution. Despite the fact that it has fewer vertical lines than 1080i, it is a progressive frame (hence the p), which means the full TV screen refreshes rather than just part. This means motion is smooth, and it's more film-like.
1080i contains more lines, as I mentioned. However, it's an interlaced format. This means that every screen refresh only changes out every other line- not the whole frame. This will often produce jaggy edges with motion. Some argue that this is in fact less resolution being displayed on the screen at any one time as it's only half the display- but that's an argument for another day.
Anyway, I'd always choose a progressive resolution. It's more filmy, and I'm just better acquainted with it. Here are some more links to read through to fill in the gaps.
http://en.wikipedia.org/wiki/Interlaced
http://en.wikipedia.org/wiki/Progressive_scan
http://en.wikipedia.org/wiki/720p
http://en.wikipedia.org/wiki/1080i