@ Danny Boy:
Yes, an HD cam to HD projection should be better resolution than a 35mm theatrical print.
In theory.
In practice, it is not. In 2002, for example, digital projection was a joke. It looked awful. It still often looks mediocre today, and in 2002 it was experimental. So, yes, if you could take the HD DI from the computer at Lucasfilm and put that on the screen, it would be better. But that's not what you see. First of all, you have a file conversion that gets compressed, so what is possible to see in a theatre is not the same as what came from the computer. But more importantly, with digital the projector is a key element. With film, the film is the element and the projector is just a light to shine behind it. But with digital the projector is actually creating the image. So, you have a compressed file that is being shown on a projector that loses resolving power and introduces tons of artifacts. If you saw AOTC digitally in 2002, for example, you would have noticed that the stars were square blocks, because thats how the projector or file interpreted them.
So it seems an unfair comparison. People say "oh 35mm resolve 5000 lines but in practice it is only 1080 when you get to a print". Fair enough. But HD can resolve 1080 lines but when you get to a projection its about 700 and it looks like ass. So make the comparisons fair. But as I said, resolution isn't even the full picture here, because in the case of Lucas you have the camera sensor which breaks up in dark areas, can't display gradients, doesn't have any dynamic range, has no depth of field because it is a 2/3" CCD, and has 4:2:2 colour space (plus it limits your shot choices, and takes more time and money to set up). This is why I always thought Lucas was a fucking moron for shooting the prequels digitally. No DP ever shot digitally because they knew all the limitations, technical and aesthetic. All the early adopters were directors, like Lucas, Rodriguez and Bryan Singer, but they weren't trained professionals, all of their DPs tried to talk them out of it and they were right.
The picture is changing nowadays of course. But there are still issues to be worked out.