the Hushed Casket

Don't have much direct knowledge of that. As I mentioned to JDogg in the HD-DVD thread, one thing you can do is ensure the video format stays in "native" form throughout as much of the transition as possible. For instance, the Xbox 360 renders most games at 720p. If you have your 360 set to output 720p then there is no conversion going on inside the 360. If you have it set to 1080i then there is a conversion to do. It's not a difficult conversion, and the time required is probably on the order of micro or nano seconds, but it is a conversion nonetheless.

When that signal gets to your TV your TV must display it. If you TV is 720p native and it receives a 720p signal then there's no conversion. If it's 1080i/p native then the TV must do a conversion.

If you are a perfectionist you want to render, output from the device, and display on the TV the same signal so that as little processing as possible takes place. Again, the processing time involved is essentially negligible, and I don't think anyone can perceive it as lag. We're really just discussing semantics.

One recent advance in this area related to home theater is 120 Hz displays. Many new TVs can output 120 Hz. Movies are filmed at 24 Hz. If you have a device capable (right now the PS3 and Blu-Ray discs are about the only game in town) you can output 1080p @ 24Hz to the TV. Since 120 is evenly divisible by 24, the TV can display the frames without any significant conversion (each frame 5 times). This is much different than the 3:2 pulldown your DVD player usually does, which converts the 24fps to 30 or 60 fps. That's a nasty algorigthm that involves splicing and creating frames that didn't previously exist. The technology is pretty good, but it's not "pure." Viewing a movie at 1080p24 is the closest you can come to the theater experience, and possibly better (no scratched film) if your home theater is well equipped.