Don't confuse your 720s. DVD is 720 lines of horizontal resolution and 480 lines of vertical resolution. HD is either 1280 lines of horizontal resolution and 720 lines of vertical resolution or 1960 lines of horizontal resoultion and 1080 lines of vertical resolution. The 1080 vertical line version of HD is progressive (only 540 lines are shown at a time with the two different sets of lines shown alternately). The new HD DVD and BlueRay disks are 1080 lines vertically, but they are progressive scan - every line is drawn every time.
I hate to keep nitpicking but it's 1920x1080, not 1960x1080.
As for Bob's comments about PC power, I have a home theater set up in my basement, all run off an HTPC (aka home theater PC), showing lots of high-definition stuff, so I'm fairly familiar with this stuff. Transport streams, etc. You pretty much need around 3gHz (or equivalent) to display HD content smoothly. I'm using an Athlon XP 3200+ and it was just
barely enough, but I recently swapped in a newer video card that does high-def and h264 decoding in hardware and that helped a lot. If you have a modern video card, go into your DVD playback software and make sure that video acceleration is enabled - it's often not by default.
My projector is "only" 1280x720, but boy, you can really tell the difference between HD and DVDs on the big screen. (Don't buy that nonsense about newer DVD players giving you a "near-HD" image - it ain't!) The 1080p projectors are dropping in price quickly so hopefully I'll be able to afford to upgrade one of these days without breaking the bank.
The only problem then is trying to make your photos fit a 16:9 screen - I have the same issue putting pictures on my wife's Sony PSP, just at a much lower resolution.