I have the Panny TH50PX20U/P with a Denon DVD5900 connected to it via Panny-supplied DVI/HDMI conversion cable.
Plugging everything together out of the box, I originally found DVD's to appear better using 480p via DVI. However, after calibrating using AVIA, and messing about with the Denon's settings (lots of useful information in the DVD forum here; the Denon also has what it calls an 'enhanced black mode' for DVI) I have 1080i via DVI/HDMI to Panny and DVD's look absolutely stunning!
I am not totally confident about the tech stuff, bit I think the reasoning goes something like this:
When you use a component connection, your original digital signal is converted to analog in the DVD player, then it is sent over to the TV and becomes susceptible to noise, then it is converted back to digital by the TV. This dual conversion introduces conversion artifacts, plus the transmission can pick up noise. Also depends on how good the D\\A converters are in your DVD player. In a DVI\\HDMI connection, the original digital signal is passed to the TV digitally. So now we are dependant on how well the DVD player creates the digital signal to send.
The native resolution of the Panasonic is 1366x768; 1080i is 1920x1080, but since you're looking at interlaced it is actually 1920x540; 480P is 640x480. The Denon has the Faroudja FLI-2310 DCDi (which is supposed to be awesome) to turn the interlaced stuff on the DVD to 480P, and also scales it up to 1080i. It sends this to the Panny which then scales it down to it's native resolution, as I can't send 720p to the Panny (1280x720).
So I second plasmic's post - it depends on the "quality" of the signal going into the Panny (the DVD player) and then how good the Panny's internal scaler is; I think the Panny handles scaling down from a higher resolution better than scaling up.
I'm still figuring all this out for myself, but I think this is how it works....
Cheers,
--Zig--