Echoing everybody else, the value of 1080P depends on your viewing distance as well as your usage. For me, a 37" 1080P LCD was awesome. I sat about 7 feet away from the display and used it for computing as well as gaming. My eyes could resolve individual pixels at that distance (could see a stuck-off green subpixel as magenta on white) so if you have reasonable vision, and are less than 8 feet away, 1080P could be for you even on a 37" display.
If all you are doing is watching HD content (no computing) and have the choice between a budget 1080P display and a nice 720P display (better backlighting, color reproduction, etc), then the 720P display could be better for you especially if you are sitting around 8+ feet away from the display.