I am not an expert on this by any means, but here's what I think is correct from the research I've done, though I don't completely understand all of it, so there are holes in what I'm going to say. Not sure how much you know already, but here's what I've found. Basically, it does defeat the purpose of 1080i if you have a 768p TV. 1080i is 1080 by 1920 pixels, and that's getting downsized to 768 by 1366 (roughly). If you put a 720p signal in, which starts as 720 by 1280, it gets slightly upsized. The result is that the two will look the same as far as I've been able to tell from watching my TV (50 inch plasma with max res at 768p).
I dunno if you know the difference between the i and p, but they stand for interlaced and progressive scanning, progressive is better for displaying motion than interlaced. Progressive scan gives you a higher quality image than interlaced because it handles movement better, so hypothetically, at the same res, progressive would always be preferred (1080p isn't really available to consumers, but it's much better than either 1080i or 720p apparently). Another factor is that different display types display the image in different forms. Plasmas (and lcds I think, not sure about this at all) always do progressive and are incapable of doing interlaced. Dlp i think is interlaced, crt i have no clue. So when my TV gets a 1080i signal, it shrinks it to fit my tv and changes it from interlaced to progressive scanning, making it basically the same as a 720p image.
Another thing about 720p vs. 1080 i, is that many people prefer 720p (or 720p upconverted to 768p) over 1080i even though it isn't as high a resolution, due to the issues 1080i has with motion and panning. The higher resolution of 1080i is not the end of the story in other words. Another factor is that even though 1080i has a higher resolution and theoretically higher image quality (so long as the image isn't moving too much or it's not sports), it's tough to find a tv that even displays at a resolution of 1080 by 1920 and gets the full benefit of 1080i. They do exist i believe, but I just poked around and didn't find one in my quick search--I think they might be really expensive. That further dimishes the importance of 1080i.
Hope this is helpful.
As for not being able to find a tv that supports it, I have no clue why that would be the case. I just looked at panasonics website to check and basically all their tvs support it of all shapes and sizes, and most tvs I looked at when picking all supported both formats if I remember correctly. So I'm not sure why you can't find ones that support it. However, if you are going to be picking up hd through a cable box, it doesn't even matter b/c you can just tell the cable box to convert the images to 720p for you (with most cable boxes I would think). I bet satellite receiver or direct tv thing can do the same thing. But I think most tvs will support both, the tv just switches the signal to whatever it is capable of displaying.