All HDTV's must include some deinterlacing and scaling hardware because of the wide assortment of input resolutions they encounter. If the display actually operates at 1080p (meaning it's a 1920x1080 or similar resolution and displays progressive scan rather than interlaced), then it will of course have to deinterlace 1080i sources just as it'll have to scale 720p and 480p sources and deinterlace/scale 480i sources. Whether that 1080p display will look appreciably better than a 1080i display depends on a lot of factors.

Secrets recently published this article about 1080p that might be of interest.