He even demoed the unit on a new Toshiba 52-ish inch 1080p DLP, which did the progressive deinterlace conversion on the set, so I assume most 1080p sets will do the same with interlacedcontent.
If either format is used to store and play back live HD content, it will have to be 1920x1080i (interlaced again) to be compatible with the bulk of consumer TVs.