SD is always SD.
Yes, the TV can "accept" a 1080i signal, but you are at the mercy of the external device upconverting 480i to 1080i.
The TV will only display 480(i/p) or 1080i. And again, it depends on the input signal.
Just because it's HDTV capable, don't expect miracles with SD material(s). You can't make a silk purse from a sow's ear.