Blu-rays, 1080i/720p and YOU! - Help Appreciated

[rlambies]

Hello

So I'm hoping for some advice/opinions/info that can help me out. I'm heavily considering buying PS3, and as we all know it comes with the delightful addition of a blu-ray high def dvd player.

My question is, having just purchased a new TV less than 7 months ago (LG 26 inch LCD - accepts signal of 1080i/720p) and its native resolution being only 1368x768p (720p) http://ca.lge.com/en/products/model/...v_26lc2r.jhtml , I'm wondering if overall its worth the extra investment in the blu-ray player.

Will Blu-Ray movies which are meant for 1080p be downconverted to 480 thus negating the purpose of blu-ray high def movies, or will they be viewed in 720p/1080i, similar to that of an HD-DVD player?

I'm also a tad confused on how the downconversion works between 1080i and 720p - I've always been under the impression 720p is actually the higher quality resolution since its pure progressive vs the interlacing of 1080i so in actuality its like viewing a picture at 1440i.

I have an HD cable box, DVR right now, and to my knowledge it puts through the signal of 1080i and when something is broadcast of 720p it will display it that or it will "downconvert" 1080i to 720p and display. I'm wondering if blu-ray on PS3 works similarily when faced with 1080p

Any info/advice/help would be MUCH appreciated
Thanks in advance
RLambies