Yes, but one is a direct scan from the negative (newer film stock too) and the other at best a scan from a copy of the negative. So King Kong should be sharper on average. But there should also be 1080p sharp stuff on the TFE transfer when we see unmanipulated live action footage.
Exactly. Are all the members here understanding this? You can either scan the original *negative* to digital, and then "master" for the release print in the digital domain (and use this digital master to derive the HD and DVD encodes) or, more commonly, you can take a film print or interpositive (one or more generations removed from the original negative) and scan that into the digital domain.
The results will all look very different. The closer to the source (camera negative) you scan, the sharper and more detailed things will look. But dependig on the way the film was produced (special effects etc.) that might not even be possible, in which case an interpositive or print is the earliest-generation "final" form of the film that can be obtained... as with T5E.
Rather than talking about a "720p transfer" a more meaningful, and accurate, way to desribe it might be to say that "this 1080p transfer has an effective resolution of about 720p"-- meaning that regardless of how many pixels you use to scan, you're only seeing a real-world result of about 720p due to other limitations, such as the source material.
BTW, even when this 1080 > 720 > 1080 scaling test is performed and shows a 720p-effective resolution, it doesn't mean that the in-motion video won't still benefit from 1080p encoding. The reason for this is that motion video has to undergo filtering for high-frequency detail to avoid aliasing artifacts pixel-by-pixel. This means that a motion image scanned with 1280 x 720 might not look as sharp/detailed as a static image captured at the same resolution. With 1080 video scanning "low resolution" film-stock, you've got more headroom for fine details, like film-grain, that can shift subtly and be better preserved in the in-motion image.