Keith C's right about the input - my TV is 'only' 720p but accepts 1080p input quite happily and if you go into the PS3 menu you can force it to only output 1080p rather than 720p, which most games support. Of course, that doesn't mean that 720p games are now 1080p but it says 1080p on my screen and that's good enough for me.
Also, a full HD TV isn't necessarily better - you'll only notice the difference between 720 and 1080p on a huge screen and even then it'll only be marginal and 1080p TVs are worse at displaying regular TV broadcasts, so unless you're planning to watch all your TV in HD then a 720p one might be a better bet.
Then again, considering how quickly prices are falling, I guess it makes sense to get the best and most advanced, feature-laden TV you can.