My 32" is 720p & 1080i. Maybe waste was the wrong word but to take full advantage of Blue Ray 1080p is the move.
In all honesty, that's a crock of shit. Depending on how close you view, you probably can't see any difference between 720p and 1080p. I have to sit 7-8 feet from my 65" 1080p in order to gain any advantagfe from 1080p. At most normal viewing distances, 720p is all you need.
Trust me, I've been at this home theater thing a lot longer than I've been at sat radio. 1080p is a waste for 75% of the people out there simply because they don't sit close enough to see the difference.