not sure why a tv labeled 720p has 1080i capabilities. sounds like its not labeled right. normally a 720p tv is only 720p.
windows is normally smart enough to default the monitor to the right resolution. if it says you are at 1920x1080 it most likely is. though, probably not quite at the quality of a 1080p tv its fine.
its easy to tell if its at 1080....on 720 things would look quite a bit bigger.
wouldnt think its doing voodoo.... a monitor has a maximum amount of pixels...it cannot magically make more. ie... a 1080 image can be scaled down to fit on a 720 screen but its going to scale it down and lose quality which you can visually see. i wouldnt see why windows would send it a 1080 image and the tv scales it down to 720. could be but if it did you would notice things like text are really hard to read.
thats the best i got.... without delving into if the tv should be labeled as a 1080i set (not 720p) its hard to give a definitive. read the manual, reviews, etcetera and maybe you can learn more. as i said, if it looks like 1920x1080 then it probably is.
I had exactly the same experience with my Samsung TV. Labelled 720p yet it ran at 1080p for my Xbox/PC... and yes, the icons and such while running windows would be small, as in to indicate that it was running 1920x1080 pixels...
However I got a 1080p TV last year and the detail is signficantly greater So my guess is it is only running 720p with the strange scaling voodoo, as you put it haha.
More than likely, what you're (the OP) seeing is that while the HDTV will accept a 1080i signal (perhaps even 1080p), it's down-scaling the image to 720p. The computer may be reporting a resolution of 1920x1080, but it's probably only sending 1080i (1920x1080 @ 29/30 Hz).
It is downconverting. It may be capable of accepting a 1920x1080 input but that's not what it is displaying. All but the earliest 720p TVs are capable of this since 720p was abandoned as a broadcast format pretty early on.
That is my TV. Looking at this it says max supported res is 1366x768. Max pc input res is 1360x768 so yes it would appear that it can accept a 1920x1080 signal but it will not display 1920x1080 pixels. Good to know, i didn't want to put more strain on my GPU then was necessary (even though it could handle it). Also now i know that instead of 1280x720 i can bump it up to 1360x768. Not a huge difference but might as well. lol