What is my tv doing when?

Okay, I'll admit, Im obsessed with this resolution debate..

I was torn between 720p and 1080i on my (native 720p) samsung 720p set.

And I did what all the callings that say, " set your 360 to your tv;s native res" in the long run 1080i just looked better and I didnt see and real slowdown on my games.

With that said, I never even noticed that 1080p was an option open to me, with my 720p set..

What exactly is my tv doing, as far as upscaling/downscaling, if I choose 1080p on my 720p set?? (with HDMI)

I know Im prolly beating a dead horse, and most responses will be , pick what looks best-- best Im wondering about the actually how the tv is rendering a 1080p scale to my 720p native and how that compares how it does the same if I choose 1080i--

Sorry for prolly th 500'th post on this..