Wow, if that indeed does interpolate HDTV content it would be a step in the direction I hope thing would take - higher refresh rates for video.

Every time I watch a pan at 24/25/30fps... argh. With the advanced codecs we're getting, we should be able to interpolate nicely into higher refresh rates - even if captured at lower rates.
Ideally, we'd get captures at 50 or 60 progressive.
ok, I'll be flamed by all the film purists saying they love the "film" look at 24fps. But remember that was selected mainly because... film costs money. Going digital, they have a lot more options... and you could still get a "reduce to 24fps" if needed.

(and get rid of interlaced content while we're at it ;)

OTA bandwidth for 1080p would not be much of a concern when using h264. It would take less than a regular HD mpeg2 stream.

Anyway, HDDVD and Blueray stated their content is stored in the discs as 1080p, and then it's up to the player to output it at whatever format you want (720p/1080i).
1080p is still not a "standard" - unless you use a PC.