There are four common formats:
480p = 480 scan lines, 60Hz
480i = 480 interlaced scan lines, 30Hz (regular NTSC TV)
720p = 720 scan lines, 60Hz
1080i = 1080 interlaced scan lines, 30Hz
Most HDTV's you can buy only natively support the 1080i format, which isn’t good. Better HDTV’s natively can run 480p/i, 720p and/or 1080i. If the TV can natively run 480i that’s good, because then it can display regular NTSC TV and it will look exactly the same as your old TV. If the TV doesn’t support these lower formats it has to “up-sample” the image, and that’s why it looks bad. (Many of us are still in the dark ages and have devices like VCRs and video games that only support NTSC)!
It costs a boat-load to get a device that can combine 480i with a better HD format; the cheapest I’ve found so far is a rear-projection Samsung model at $1400. It only supports 1080i and 480i/p though, so 720p images have to be up-sampled.
DVD format is 480i. I believe most DVDs are 16:9 480i, which means they are 720x480 interlaced. Some DVD players that have HD outputs up-sample the image to 1080i, some output the image as 480p. it depends upon the model. There's a big debate over which is better, I suppose it depends upon how your TV displays the two formats (up-sampling vs native support).
720p seems like the best format, but there are very few devices that support this natively under $4k. They all seem to be plasmas. Pictures look the smoothest under this format because there’s no interlacing and it’s a high resolution.
720p also seems to be the best because there’s something about the connector format for this resolution that doesn’t support broadcast flag. I don’t understand this part yet, but that appears to be what I’ve read. 720p typically uses a single RGB (DVI) plug, whereas 1080i uses a three plug Y/Cr/Cb system. A lot of people on slashdot are pissed off because they have $6k plasma displays that only support the RGB plug, but Y/Cr/Cb DVD players just dropped in price this year and they all support the broadcast flag (they were manufactured before it went into effect). So if they want a RGB DVD player they have to spend BIG bucks (actually they might not even exist, I'm not sure) or buy a very expensive external converter. Broadcast flag will be pointless, but only for those who can afford the better equipment.
The xbox seems to support all the HD formats above from what I've read. I'm not sure, but I believe when the xbox plays a DVD it outputs the signal as 480i. Sampling to any other format would require some big hardware that the xbox doesn't have in it.
Taking all of the above into consideration, I think we can conclude the FCC really screwed up. If it takes someone like me this long to just partially understand all of the different ways HDTV can work, it's too complicated. They should have made HDTV just one format and stuck with that. It's silly that some devices support some formats and others do not.
It's gonna be chaos when they announce the obsolesence of NTSC broadcasting. Which, btw, I still very much enjoy, and I'll be very upset if the FCC obsoletes my NTSC WEGA any time soon. I refuse to pay to watch television; subjecting yourself to advertisements shouldn't cost you anything. Actually, why the hell am I even worried about this? TV sucks! Kill your HDTV. ;-)