I think I read that it is limited to 720p for Firefox on Linux (probably for DRM reasons). For the most part, it looks as good to me as typical 720p or 1080i ATSC over-air broadcasts. And, I'd say both look better than the typical digital cable or satellite TV I've seen elsewhere.

I have a 1080p TV, but the only time I've really cared is certain 1080i PBS shows, with natural landscape scenes deinterlaced via MythTV. Otherwise, 720p seems fine. It feels to me that every provider is optimizing their compression levels for an audience who is less picky than me. Usually, I am bothered more by inconsistent compression than absolute resolution.