How close to that 1080p TV to realize the benefit?

1080p charted: Viewing distance to screen size - Engadget HD

Interesting chart.

For my 51" TV, it's about 6 feet.

For my 57" TV, it's about 7.5 feet.

Only the latter supports 1080p, but for example's sake, we'll fudge.

Basically, if you sit 10 feet away (which would be about normal), 1080p isn't going to mean squat. Even on these 50"+ big screens.

From my experience, I'd say this could apply to upscaled DVD vs Blu-ray/HD-DVD as well. The further you sit away, the less difference it makes. Movie lovers might want to consider moving their couches back 3-5 feet rather than diving into the format wars.