Who said anything about playing 720p content? I said I was playing back 480i content on a 720p TV (actually, it's a 1080p TV, but the iBooks were set to use 1280x720).
Regarding Hulu, indeed it is no surprise that it chokes. I have played video from Hulu (content also probably 480i, but it is hard to tell exactly what resolution they pick for the content) on my TV at 1920x1080 resolution via my PowerBook G4 (1.67GHz) and Safari 3 and gotten a barely watchable framerate of probably around 10-15fps. Flash is a dog on PowerPC. The same content that chokes a flash-based player works fine in VLC if you can download the original file.
To play HD content, you really need at least a fast G5 or an Intel Mac.
Peace,
Drew