Go with the 42 inch, most of the stuff on basic cable isn't in 1080 your not going to notice either, we got a 37 1080 in the living room, and we only have about 30 channels that are 1080 so its kinda a waste of money for us,
I'd say the 720p one. As others said, there aren't too many stations airing in 1080, and a 720p TV can still view a 1080 channel.