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Nah idea like to record in 720 just to to be able to watch a nice picture on big screen. I need to buy a mini camcorder but would rather have built in on phone.
The Droid's screen is 16:9, in fact it's perfect 480p. So viewing 720p content on it would still look exactly like 480p. But it'd look great on the computer or TV.
Also, the Droid tends to only want to play videos with a total bitrate of about 1600kbps or less. That's on the mid-to-low end of the spectrum for 480p quality, so that's another limitation against 720p playback.