It depends on your distance. See this analysis of size v. distance v. resolution.
Thanks for sharing this chart. It pretty much nails my feeling on this. I watch a 61" Samsung from about 15 feet and I can tell that 1080p is better, but 720p is more than enough for 90% of content.
I couldn't be happier that they are finally selling 720p movies. Sure I wish they were a bit cheaper, but I have a couple hundred DVD's that I never watch because they are stuffed away in boxes in a closet. I much prefer digital media and I'm willing to sacrifice a bit of quality for convenience and not storing hundreds of discs in some way.
I've had BluRay for over a year. I own maybe 6 movies in that format and I've watched each of them less than twice. Not really worth an additional $5-10 premium (I haven't gotten one for under $25 yet.) And any I have bought I bought with the digital copy included so I could transfer to my iPhone and AppleTV and I've watched those more than the actual disc.