So how good does 1080p iTunes movies like LOTR look on a late 2012 27" iMac?

Really good? I'm not really sure what you're after, here.

 

Looks like a juicy rib eye steak...

 

I think he is wondering if it looks disorted or pixelated since the iMacs 27 has a higher resolution than 1080p.
I think its looks good but not as a good as 21.5". Thats just a guess though

 

Don't worry, it will look fantastic. The iMac screen is awesome!
1080p is the quality I look for when I download movies. IMO the 27'' in general scales very well down to 1080p resolution, including games.