I run a 9" Sony 1292 on a 87x49" Studiotek 130 screen, and 480p is unwatchable (the black lines between picture lines are about as big as the lines of picture, and are clearly visible even 11' out).
If you aren't having those problems, you might want to look at your setup (optical focus, scheimpflug, astigmatism, convergance).
If you are, you probably want at least 720p. A good scaler or HTPC will give you even more flexibility here - you'll be able to pick a resolution where the scan lines just touch so you get the sharpest posible smooth, film-like image.