We will leave the breakdown of spatial and temporal resolution to Tyler, but there are several elements here to consider.
Many people like to discuss HD formats not only in their resolution but also the amount of frames displayed per second (720p60, 1080p30, etc.), and while lower frames per second is just fine for movies, it might not be as good for things like sports and videogames. I'm not sure if I agree with all the points however, since they seem to assume most games run at 60fps, which while some early 360 games have (DOA4, NBA 2K6), some have not (PGR3). I think it's fair to assume we'll see higher target framerates in upcoming games, especially twitch shooters like Halo 3.
They don't mention the Playstation 3 specifically, but it definitely looms large for high definition gamers. As mentioned in this interview, the current HDMI spec does not require a TV to accept 1080p (although it supports it), and even TV's manufactured by Sony don't accept it. Of course, Sony could just end all this speculation and guess work by showing us a PS3 powering two 1080p screens beautifully, at which point we will collectively hand over our wallets, souls and firstborn children.
Whether you accept Tyler's points or just consider this a sign of Microsoft copping some 1080p pleas, it's clear that just like ESPN and ABC they have picked 720p as their target resolution for HDTV, but whether that is high definition enough to satisfy consumers remains to be seen.