32" TV: 720p or 1080p?

If you have sharp eyes like mine, you'll probably see the difference.

If I were personally purchasing the TV, I would go with the 1080p one. However, I understand how you want to save money at the same time. Perhaps you could go into an electronics store, and look at the different TVs on display. Ask an employee to play some content in in both 1080(i or p, both will look about the same) and then 720p. In both cases, 1 TV or the other will be re-sizing the image. This comparison will give you a good idea of which TV to purchase.

However, if you still want some more advice, consider what the TV will be used to view. If you are going to watch a lot of sports channels such as ESPN, or CBS, or FOX (probably a lot I'm missing, just listing a couple), then these channels all broadcast in 720p. If you are going to be watching movies, then they will most likely be in 1080. 1080i for TV stations, and 1080p if you have a blueray disk usually. Right now, most TV stations only have 1080i broadcasts, because 1080p takes up twice as much bandwidth. Most 1080p devices are going to be devices like computers, gaming consoles, or blueray players.

With a 32" TV you're not going to see your $100+ difference purchasing 1080p. At that TV size I would stick with 720p (that's what I did even with a 37") and I've been fairly happy. I kept the different and bought some more blu-ray's. The TV stations come back out in 720p or 1080i and look fantastic and I don't see a need for anything more like 1080p.

I myself have looked into a new TV (55" now for home theater) and will be going all out 1080p and high-end blu-ray player.

My experience has been on smaller TV's (not that 32" is small) 720-1080 there isn't really a visual difference people can see.

On a 32" TV, you won't notice much difference between 720p and 1080p. If you're going to watch Blu-Ray movies, use the TV as a monitor, or play hardcore video games, get the 1080p one. If all you're doing is watching broadcast TV, get 720p and you'll be fine.