Stephen Orr of ATI said on the AVS forum that 720p won't be supported till a later Catalyst release. So it's only 640x480 at i or p for now. Plus, he said the MV detection is built in at the driver level, so it will block higher rez even from PowerDVD and other players. You'll have to rip the DVD to disk and remove MV to enjoy 720p and up (once higher rez are supported by Catalyst).
Here's a
link to the main dongle thread at AVS. Orr's comments are in several threads, though. The dongle won't work with other cards, since it uses the Radeon's DACs to build the signals. I'm thinking of getting one for my Tau (480i), too, but I'm waiting till there's a solution for the image sizing and overscan problems. No one's been able to get it to work right yet.
Updated: Apparently, the latest Catalyst
will work at 720p and up. In Orr's most recent comments, he said that 540p isn't supported, but that may not be the case. Still no solution for overscan at 480 i or p, though.