From another thread:

My suggestion is to always let the TV/monitor do the final conversion to its native resolution. Most sets have better scalers/deinterlacers than external units.

I was hoping to get other opinions about if I would get better PQ by sending a 1080i signal from a Sony BDP-S300 blu-ray player to a Mitsubishi HD1000U proj. which is native 720p.

As I said on another thread, I don't think anyone has done any testing to show which deinterlaces or scales better. You should send the projector 1080i, 1080p (yes it can except this even though it's undocumented), and 720p and see which looks best to you.

This review found the Sony's deinterlacing and upscaling of 480i to be excellent on HQV video tests, whether this translates to deinterlacing of 1080i (which is much easier than 480i) and scaling from 1080p to 720p is just a guess.

http://www.hometheaterblog.com/hometheater/2007/06/
sony_bdps300_bl.html#comments

MODERATOR, PLEASE REMOVE

duplicate of "hd1000u (downscale or native)?"