Is this done by the TV digitally scaling 720p to 1080i, thus introducing the same scaling artifacts and slight 'softness' you would get when scaling 720p->1080p on a digital display?
If not, what artifacts or picture quality degradation can occur when viewing 720p on an HD CRT that converts it to 1080i (besides the interlacing...) compared to 720p on a CRT monitor that supports native 720p display?
A CRT monitor has no loss whatsoever since it doesn't use a comb filter or digital conversion IC like in HD CRT's and most LCD and Plasma TV's. A CRT monitor(with a trinitron (no fixed pixel) tube) has any resolution as it's native resolution and resolution and quality is only limited by maximum horizontal and vertical frequency of the TV and beam width. A CRT monitor can have a much higher resolution than 1080p (up to QXGA in 37'' monitors) and have no quality loss whatsoever.
A CRT Monitor is ALWAYS better than a HDCRT. Better precision, tube quality and reliability. Even a mid-90s Mitsubishi Megaview monitor (let's say the XM-3716C) has a better quality image IN SD(800x600 or in S-Vid) than a Toshiba 34HF85C in HD. There is no comparison between the two.
Only thing, high-class monitors are HARD to find and even nowadays costly. A NEC XM37+ can still be sold for more than 1000$ and XP37 Xtra's (QXGA) like mine are even rarer and you can only hope the seller doesn't know what he's selling.
A CRT monitor can have a much higher resolution than 1080p (up to QXGA in 37'' monitors) and have no quality loss whatsoever.
In fact quite a few 21"/22" and even some 19" CRT monitors can do QXGA. But physically that becomes more difficult to achieve as the CRT gets bigger than that, which is why the NEC XM37 and XP37 were so impressive and are proof that 1080p+ resolutions on a mid-size to large CRT are not impossible as Sony, Toshiba, LG, Panasonic, etc. would have had us believe in the last decade.
It's too bad that all the mainstream electronics manufacturers had to ruin the true analog-ness of their CRT HDTVs by using digital upscaling and line-doubling circuitry, rather than allowing true analog multisync. As mentioned before, the monitor will give you a purer, unprocessed picture.