How much a difference is 720p vs 1080p as far as picture clarity and other factors are concerned?

Having the seat on the same distance on a 720p and 1080p, the 1080p shows sharper image. It is more obvious on large screen flat screen tvs such as 46" and above otherwise there is not much significance on a scmaller screen. However putting the seat farther away on a 720p could achieve the quality of 1080p.
Plasma: better color and excellent refresh rate when it comes to games and fast motion images. On the downside, it consumes more energy and the screen is reflective which is annoying when watching in bright rooms. LCD consumes less energy and not reflective and more brighter than plasma.
If your into bluray and consider the above information, the LCD is better. However if you like it big and watch mostly TV HD broadcast, sports, and video game in a not so bright room, then the plasma has the edge.

a lot depends on the lighting in your room and the type of material you watch...if you have a room that is bright and gets lots of sunlight then the plasma is not going to work well for you, as it will wash out during the day... if you have a darker room you watch a lot of sports programs and movies at night then the plazma may be better, more of a home theater type experience and less blur on fast moving tagets ... how ever in a 50 inch TV a 1080P is going to have a much better picture, than 720P you will be able to see the difference in that size TV between 720p and 1080P...an LCD is really good for watching casual during the day as it is less effected by amient light..so a lot depends on your individual watching habits...

1080p LCD will make a better monitor. Give you native resolution on HDMI without stretching or distorting the image and is cheaper.

i'd choose lcd because it has the same resolution if you see from all the angles and there really is'nt much difference between 720 and 1080p but 1080 is really sharp and great for blu ray or gaming.