I think the normal person would care, because it will become a massive topic discussed on every technology forum. Anti Apple people would have good fuel to mock this device and the general consensus out in the wild would be this thing doesn’t have proper HD and that is what the general public will hear.
On the other hand, I think it’s a great idea especially with Apps. I have heard people say why do they need Apps for their television, but I can think of endless things. Besides games (hey, why not), there will no doubt be specific TV viewing apps for specific channels or services, TV guide Apps, Streaming apps such as Air Video (great to get films from your PC to your iPhone, and now perfect straight to TV). Photo Apps to stream your images straight to your lovely 110cm monster. The idea’s are endless.
But, without 1080HD it would be a bit silly.