Get a cable that connects your Graphics card directly to the TV.(If your graphics card supports 1080p) The computer will up convert to the resolution of your graphics card. i.e., You play a dvd in the computer - dvd is 720p - your video resolution is 1080p on the graphics card - you watch in 1080p. You'll notice a diff between 1080p upconverted(slightly less quality) and true HD 1080p. but 720p up converted is still awsome.
P.S. sound is from pc speakers.