I don't really care that much, but if it is not at least 1080i then forget about it. I would prefer 1080p, but that is a lot of information for a flash drive or micro SD. And it is also a question of compression and bit rate, I think there is no way they will compete with Blu-ray on image quality. I do think it will be better than standard DVD.
My real question, would TiVo support a USB flash drive movie at some point? Or could the current boxes even be updated to do it? I am pretty sure I would be able to watch the movie, via my network, on my TiVo from a computer in my house...