720p and blue ray Hi Def

[Diba420]

I tried doing a search but couldn't find anything that addressed what I was looking for directly. I'm not very good with HDTVs and upscaling and what not. I have a tv that is 720p but doesn't support 1080i or p. I was told that blue ray discs only support 1080. I also heard that after the 1.80 patch for PS3 you can watch blue rays in hi def at 720p. Is this true? What should I change my DVD upscaler settings to on my PS3 for the best picture? Like whats the difference between full screen, normal, double screen and off? Are there any other settings I can mess with to get a better picture? Thanks in advance.

Here is a link to my TV if it'll help:
http://www.walmart.com/catalog/produ...uct_id=4529482