Hmm..
People saying Nokia screen resolution is 800*480 so it can't play higher resolution than that it's wrong.
I had samsung sgh-i450 before with 320*240 resolutin but it could play 720*480 videos with coreplayer and smartmovie.
the playback capability isn't determined by screen resolution but by processor and the software u using, How well the the software resize it according to screen.
I have played 720p videos on N900 using Nitdroid 0.0.8 before using roxplayer or rokplayer i don't remember the name.But strangely mkv and mp4 play much better using Nitdroid then using N900 default player.