most HDTV nowadays are 720p and 1080i. And some HDTV with 1080p won\'t accept 1080p input because lack of copy protection and probably cost too. It will accept 1080i as its highest resolution and de-interlace it to 1080p.
So, if your analog TV is doing fine and the picture quality looks good, then waiting till next year where there are more 1080p TV coming out and hopefully by the end of next year or so, they will finally have 1080p copy protection figure out and support on newer set.
Why is 1080p important? Both Blu Ray and HD-DVD supports them and movies are encoded in 1080p/24 format.
Even PS3 support 1080p for games that use that resolution.