As long as you have the way to connect the two ... HDMI cable ... it will work fine as you have it.
But the definition won't be up to what blu ray can produce. 1080p has over twice the number of pixels than 720, and is true HDTV where 720 is not. You'll notice it more on movies that are specifically done with 1080p in mind, such as the newer Disney Pixar animations which are amazing in blu ray. Older ones generally not.
You could wait until they come down in price a bit more, which they will do and maybe not too far away either.