“If I shoot video in 1080i mode with my camcorder can I output later in 720p?”
Most consumer high definition camcorders shoot video in a 1080i mode, usually 1440×1080. The format the camcorder records video in does not dictate the format you output from your editing software. If you start with your 1080i video in your favorite video editing application (for HD editing, I typically recommend Pinnacle Studio or Sony Vegas) you can export several versions of the video when you are finished. Most video editing applications offer either outputting your video as MPEG-2 1080i, which is the same format you started with, or they give you a number of additional choices.
For instance, Sony Vegas gives you the option of saving 1280×720 videos in MPEG-4, WMV, or DivX formats. Pinnacle Studio offers similar options for outputting HD video. Mac users also have the option of converting the 1080i video shot with their camcorders to 1280×720 MP4 files when exporting video from Final Cut.