I am no expert in this field by any means, but i suppose the best way to look at it, with consoles, Wii graphics vs the PS3/360.
The Wii is DVD Quality
PS3/360 is Blu-Ray-X264 quality.
DVD ranges from 480 to 576 (i believe)
Blu-Ray-X264 is usually 720-1080
so in laymans terms
480 = 720x480 pixels (widescreen)
520 = 720x576 pixels
720 = 1280x720 pixels
1080 = 1900x1080 pixels
and the more pixels the better the quality, so if you have a projector/HDTV which can display HDTV properly, then start downloading x264 is my advice.
Obviously you can still get crappy cam like x264, in my experience, which is not by any means great, 720 x264 should be just less than DVD9 or 8.5 gig, 1080p is closer to 13-15gig for good quality, obviously you may get some less than that for old films as an example, and they will still look ok, but dont expect to download a new movie as a x264 at 2.5 gig filesize and expect it to be a great copy.
Obviously if i am wrong on any of the above, please feel free to correct me, but that is how I understand it all works.