Is my friend right? 720p vs. 1080i problem

[LondonBroil]

We're looking to buy a new tv for our new house. We've been researching the technologies a little and had decided on this DLP Toshiba Toshiba 52HM84 .

Have read the reviews for this model and most of them talk about how great the picture looks on the HD channels which we'd primarily be using it for.

However, after showing one of my techy friends the specs, he goes off about how the HD channels are broadcast in 1080i resolution and this TV only supports 720p. Basically he says that the TV will take the 1080i signal and digitally convert it down to 720p making the picture not look as good as a 1080i picture.

I know a few friends of friends though who have DLP TVs that are 720p and they say the picture is crystal clear, and most of the reviews I've read have no mention of the converter problem.

My friend thinks I should go with a newer 4-gun CRT HDTV that don't have the viewing angle problem that they used to have. My living room isn't extremely large though so smaller would be better.

Does anyone here own either a 720p or 1080i resolution TV and can tell me if there's THAT much of a difference between picture quality? This is our largest purchase for the house and I don't wanna screw it up. We're looking to spend around $2200-$2500 for the TV and stand (if necessary).