I've always said that going to HD means you have to lower the graphics tremendously compared to what would otherwise be possible in video games, but today I tested that claim for myself. 

I ran Halo PC (with the xbox360 controller to boot!) firstly in 480p 4:3 ratio resolution.  It ran at a steady 40 frames per second with vsync, loads of bump mapping, crisp textures, specular highlights, pixel effects, the works.  Everything was on the highest setting, and at 480p, the game shined. 

I then tried 720p with widescreen ratio and all the graphical settings the same.  If I was staring at a wall I'd get 30 fps (frames per second), but in a gunfight I would get the magic number 6.  You can actually get the game to display its current fps, and at 720p, it was almost always running at 6 fps. 

I then convinced myself I was right - about the 360 needing to crank down its graphics to get 720p running smoothly - by turning all my settings down to minimum.  Low res textures, barely any specular mapping and bump mapping, no pixel effects, no bullet shells in the air, no explosions, absolutely bare bones, and I managed to get it to run a little under 30fps.

This has convinced me that Nintendo has made the smart choice to stick with 480p for the time being.  When it comes down to 720p + crap graphics vs. 480p + beautiful graphics, the choice is clear.  Sure, the 360's visuals look great anyway, thanks to its expensive hardware, but now I know that 360 customers aren't getting the visual experience the system is capable of giving them, due to the imposed standard of HD.

My PC specs:
CPU: Pentium 4 - 2GHz
GPU: Ati Radeon 9550, 256 MB
System Memory: 512MB
OS: Windows XP