noninterleaved that number is 720p/i, not 768p/i, becuase we're not talking about computer resolutions which work in 4:3.
btw, fyi, you should read the Anandtech article on the Xbox.. if it is accurate (I don't trust reviews on consoles, as I don't even understand how the PSX can output 480i with it's puny memory), though I think basically Anand said this: the rasterizer can render at fairly high resolutions at the expense of memory-bandwidth. so I personally don't think we'll see anything higher than an internal rendering of 1280x720 progressive. FYI I think the XBox memory bandwidth is something like the GF3 Ti200 (but shared with the P3, which can take about 1 gigabyte/second), which is 128 bit 200mhz DDR by default if I know my specs correctly. the GF3 Ti200 works perfectly fine at 1024x768, and probably does fine at 1280x1024 in 3D applications, but I don't expect it to go any higher (1920x1080 interlaced) due to memory bandwidth AND size restrictions (framebuffer gets pretty large!).
HOWEVER, even if it internally renders at 480i, you can set the XBox to upconvert that picture into 720p or 1080i becuase it has a sort of TV out chip. at best, it might help quality with a line-doubling effect (going from 480i to 480p) which also halves framerate though that doesn't really matter since we're talking about such low resolutions with a chip capable of pretty high resolution images (which means basically that it will run as fast as it can, unless the software prevents it from doing so)anywho, as a result, the GPU potentially could be rendering 120 FPS and sending that to the TV out chip which performs a line-doubling technique and consequently halves the framerate...
that is, IF I understand this Xbox in the first place