NightStorm
macrumors 68000
Sorry, I should have clarified, I was using Home Sharing, so maybe the downscaling is happening on the computer side?
The AppleTV v2 can now downscale 1080p to 720p in real-time with the latest software update. This happens on the AppleTV, not on the computer running iTunes.
The iPad 2 will not transfer a 1080p video via iTunes; there is no automatic downscaling, requiring you to have two versions of the same movie if you want to be able to play it on the device.
TV 3 will try to play 1080p60fps .m4vs but they tend to have an odd strobe-like effect. It clearly can't handle the 60fps. If you have that kind of content, consider mastering in 60fps (native) and then downconverting a copy (at 30fps) for