I read somewhere that some older 720p projectors that can take a 1080i signal will downconvert it to 540p first and then upscale to 720p. Even though the HS10 is 1366x768, does it also do this?

I have my PJ connected to the Xbox 360 which I use for HD-DVDs and gaming. Right now I have it set to 1080i as I figured it would look better downscaling from 1080i than upscaled to 720p. However, if it downscales to 540p first, then I assume choosing the 720p setting would be preferable.

Any help would be greatly appreciated.

You may not see any difference.

My thought to you is to try it and see if you notice a difference. Most likely you won't. Just use it whatever and have fun playing your games and quit worring about 1080i vs. 720p. The biggest difference you are going to notice is going from 480i to 480p, anything else is very difficult to tell.

I have an HS-10 and have wondered about this. I have compared the image from my HD cable box when set to 720p output, and 1080i output and found that the 1080i output looks noticeably sharper on the HS-10.

I have the HS20 - basically the same machine... I think it converts to the native res and not a double conversion. 1080i looks better than 720p in my opinion.

I have a Denon 3910 DVD-Player and I'm feeding my HS10 with 1080i, which looks in my eyes slightly better than 720p (very minor difference). Both 720p and 1080i signals, however, look significantly better than feeding 480i due to the great deinerlacer / scaler of the 3910.
It's interesting for me that 720p does not look much better than 1080i because with 720p the crucial deinterlacing would be done by the 3910 (which should have the much better deinterlacer). Any explanations? Because it's "simple film modus" only (original source is already 480p)?

That's great to know, thanks for the responses guys. I did of course compare between the 1080i and 720p settings, but couldn't really see much of a difference. But the reason I was concerned is because I also have a PS3 in which I don't have a choice but to output BD material at 1080i as the 720p setting would make PS3 downscale to 480p. Some of the first BD discs I had didn't look that great, so I was concerned it was because the HS10 was downscaling to 540p and then upscaling back to 1366x768. Good to know it was probably the BD disc and not my set-up.