Apple began offering HD content on the iTunes Store in 1080p a little over a year ago, and has been gradually increasing the amount of content available in the higher resolution. The good news is that Apple considers the 720p and 1080p versions of HD content to be the same purchase, so if you have older 720p content sitting around in your iTunes library, you can very easily upgrade it to the 1080p simply by downloading it from your iTunes Purchase history.
To do this, ensure that your “Preferred Video Version” is set to 1080p in your iTunes Preferences, and then simply go into the iTunes Store and select the “Purchases” link near the top-right corner. You can access a list of all of your previously purchased movies and TV shows from here, and any that are available for re-download in the higher resolution will show an iCloud download icon beside them instead of the word “Downloaded.” If you have a large library of purchased 720p content, it may even be worth checking back here from time to time to see if any new content has become available in the better format. Keep in mind, though, that downloading the 1080p version doesn’t remove the older 720p version from your library, so you’ll have to go and do that manually if you want to conserve disk space and don’t need to keep the other version around for syncing to older devices.