Ok, for the fact that you play 360 tells me that you might want the 1080p, just to feel like you're getting every bit of performance that the console is capable of...I would but that might be me.

Sports, meh, I think you'd be better off with a DLP for sports, but don't know about the space you have for a DLP set. The signals you'll be getting are going to be either 1080i or 720p from your cable/satellite provider so 1080p doesn't matter so much there (see above regardless).

My TV is a 42" Magnavox 1080p LCD (got the 1080p in a 42 because it was on sale via Costco and it was below what I was going to pay for a 37" 720p set). And the 720p signal is soooooooooooooooo much better than the 1080i...interlaced pictures drive me nuts, though I knew that prior as I work for an Audio Visual company and I see all sorts of cool shit on a daily basis, so you could say I got spoiled with progressive pictures.