Funny that the iMac has a higher resolution than your standard 55" HDTV and would benefit more from HD than a TV.
And yeah OP. I've been completely happy with SD content even on my 46" Bravia for years. But now I have a 1440p display things are starting to look a little low res! And I hope this works out for ya. The 6970 is a superb card. Was playing GTA last night, 1440p with everything set on medium-high for a super smooth 60fps. Looked gorgeous! Go for it.
It all has to do with viewing distance, and with the 27" iMac we tend to sit very close while watching movies, so it become very apparent SD Vs HD, SD is almost unwatchable on the 27". Typically People sit about 10 feet away from a large screen, so the SD content is very watchable plus the current crop of flat panel do an excellent job of up scaling content.