professorhat:The only answer to that is whichever you prefer i.e. try both and stick with the one you like. There isn't a right or wrong answer.
Would have to dissagree with the Prof there on this one. There is one simple answer to output settings on you Sky HD box and the is
AUTOMATIC. The scalers inside the HD box are not very good and your TV will do a much better job upscaling SD material that those inside the HD box, and when you switch to a HD channel it will switch its output to either 720p or 1080i dependant upon the resolution that the HD content is being transmitted at, tho AFAIK 99% of HD content on Sky is at 1080i.