1080i output to a 720p

[Fred Bang]

Hello everybody,

I have a JVC HD-ILA 720p (which really is 768 lines) and a PS3. I found out that if the output of the PS3 is to set to 1080i (instead of 720p), the picture is much better, probably because it is now downconverted to 768 instead of being upconverted from 720p. (set to 720p, I can see all sort of halos around edges)

The caveat of setting it to 1080i though is that the motion seems less fluid. I guess I'm now seing 30 fps instead of 60??

My question is this: The native resolution being 768p, by inputting an interlaced signal, does the output still remain progressive?