Here's a visual example of what I'm talking about. Here's an image from Puggo's site showing a frame of a DV capture with 480 pixels of horizontal resolution:

[img]http://s12.postimage.org/iks9qqn3d/DV_Before.jpg[/img]

The great thing about this image is the fact that it's an anamorphically squeezed image. There's much more resolution available than say a letterboxed 4x3 (ie the GOUT). So, here's the same image but stretched out to 1280 by 480 (1280 being the horizontal resolution in 720p)

[img]http://s18.postimage.org/k91uq9cut/720_HDafter.jpg[/img]

NOTE: this was just a quickly done example to show how stretching out the initial capture would work. Please note, the 720p example does not reflect the correct aspect ratio.