With that size of a TV and the distance you are playing at, you should go with the 720p.
The highest resolution that the 360 can put out is 720p, however, getting a 1080p will not show you any true difference in gaming.
Save your money and stick wit the 720p in my honest opinion. I have a PS3, and I am content with my 720p 32" LCD. The quality is not all that big of a difference to me.
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