High definition television can be confusing, can't it? You have to worry about the different types of TV. You have to think about digital vs. analog. And you have to struggle with resolutions. Sheesh!
Well, let me set your mind at ease. Your 720p set will work fine. It is a high definition resolution. Some broadcasts are done in 720p, others in 1080i. High definition discs come in both of those, plus 1080p.
The signal's resolution is not really important. Televisions automatically adjust them. So a 1080i broadcast will be adjusted to 720p by your TV. That is true for 1080p discs, also.
Before we go any further, let's explain these resolutions. The 720 means you have 720 horizontal rows of pixels. The 1080 stands for 1,080 rows of pixels. The high number of pixels makes both high definition.
The p stands for progressive; i stands for interlaced. P is televisionese for non-interlaced; you may have seen that term in old monitor ads. It refers to the way rows of pixels are refreshed electrically. Row one is refreshed, then row two, row three, etc. This happens many times per second.
On interlaced monitors, row one is refreshed, then three, then five, etc. When the bottom is reached, the process starts over. Row two is refreshed, then four, then six, etc.
Theoretically, 720p and 1080i should be about the same. The 1080p sets supposedly have better pictures. In fact, that's the highest TV resolution available. But I've looked at all side-by-side, and they look the same. I just don't see a significant difference. I think the manufacturer's quality is more important. And Panasonic is a high-quality manufacturer.
Interlacing can cause flicker. Modern monitors are never interlaced, because we sit so close to them. But TVs traditionally have been interlaced. Supposedly, that shows motion better. But the cathode-ray technology in old-style TVs goes back over 100 years. I think the industry just saw no reason to change.
At any rate, you shouldn't sit too close to a TV. That is, not if you want a decent picture. So, both progressive and interlaced setups work well.
So, to answer your questions, your TV is high-definition. You certainly should upgrade to high-definition service. And you will benefit from Blu-ray Disc. Any hi-def DVD movie you buy will be Blu-ray.
Manufacturers seem to be phasing out 720p. It's generally only available on smaller sets today. But, as I said, the difference just isn't significant. You're going to like your 720p picture just fine.
One other thing, in case you were wondering: Your set is digital. So you can ignore the transition from analog to digital TV. That will happen June 12, if it hasn't already.