use MPEG Streamclip to create ProRes (or whatever your editing codec is).
as far as 720 vs. 1080, the native size of the Hero HD sensor is 1280x960p, which is 4:3. it's an odd ratio and resolution, but thats what the GoPro guys told me at NAB. this gives you the widest angle and it also allows you to move the image up and down in FCP to select the best framing for your shot. when you select the 1080 setting, it's cropping the sensor (ironically) and upressing in camera. since the 960p setting gives you more sensor info, i would go with that, and upres later.
60p seems smoother because its more frames per second. if you want to take 60p to 24p in real time, then you need something like Twixtor. if you just drop the 60p clip into a 24p timeline in FCP, it will throw out the extra frames and it will have choppy playback. Twixtor will smartly blend frames and you can add motion blur to make it seem like it was shot at 24p. i've used the Heros quite a bit and we run everything through Twixtor to get 24p. if we want to slow things down (which is what a lot of the test footage on GoPro's site is), we retime using Cinema Tools. we only shoot 60p if we know we're going to slow the footage down.
MPEG Streamclip is the fastest transcoder we've found. it also has a surprisingly good scaler.
as far as how good it will look on a big screen? as i explained above, you won't see a difference in quality between the 720p and 1080 out of the camera since the sensor isn't 1080. if you want the 170 degree view that the camera is capable off, then you need to select 720p anyway. due to the bend in the image from the fisheye, we usually take the 1280x960p image and stretch it to 16:9 and blow it up to 1080 (instead of changing the framing as i mentioned above) and get good looking results. but remember, this is a $300 camera. if you want it to look good on a big screen, make sure you're shooting compelling content.
e
Eric Hansen -
http://www.erichansen.tv