Why give a crap about SD to HD then? Resolution is resolution. If you think that's going to be the only difference between Microsoft and Nintendo's hardware, you're going to be surprised. All resolution dictates is the rendered pixels, and fact of the matter is 1080p looks crisper, cleaner and far nicer than 720p. Not to mention pretty much every modern display bar the lowest budget line is built to natively render at 1080p, forced to upscale 720p.
But more importantly, that certainly wont be the only thing that separates the two. It's simply an added bonus of having stronger hardware: better overall rendering IQ.
I will, however, make an argument that a lot of people wont notice it. Mass market consumers wont, just like they probably don't see much of a difference between Call of Duty: Black Ops PS3 and WipeOut HD, despite the latter regularly rendering at near twice the resolution. What they will notice is all the bells and whistles on top of that. And like z0m3 said, a lot of next generation games will probably run at 720p anyway, as developers wish to focus resources towards extra effects.
But, end of the day, I take ShockingAlberto's stance (regardless of him telling people not to take it as fact). I expect the Wii U to be more powerful than any current generation title, and by an amount that allows for ground-up system pushing titles to legitimately look better. I think we'll see a lot of titles that don't do this, particularly ports. And, when Microsoft's console arrives, I'm expecting it to smoke the Wii U's performance, far and beyond any Wii U = PS2 / XboxNext = Xbox kind of comparisons. And I expect it to be stupid expensive.
