I use overlay function from the Nvidia drivers. This resizes the videostream to full screen on the DVI out whatever the native video file resolution might be.
I still request DV-Pal from the editors, since they often have hardware that does this well, but H.264 sure looks good too. I haven't tried HD resolutions in PT, but 720P worked just fine on several videofiles I tried.
You can read about my HDD-setup here:
http://duc.digidesign.com/showflat.p...rt=&PHPSESSID=