@JJ
If your TV can accept 1080P through the DVI/HDMI input, then it will display 1080P, otherwise it will display 1080i max.
Since you've got a 8600GTS, you'll have the Nvidia control panel from which to set up your output resolution. Your TV should be automatically identified by the software.
One good reason for going the HDMI over VGA is that you can combine your audio. If you've got onboard RealTEK audio with an SPDIF OUT header on the mobo, just connect the output to the SPDIF input on the graphics card and make the SPDIF settings in the RealTEK audio software: -
Sampling Frequency 96KHz or 192KHz
SPDIF output - Audio Device (not by-pass)
If you prefer to have 5.1 or WHY through co-ax/optical, then set the sampling rate to 44.1KHz or 48KHz.
If you're using PowerDVD, then set the audio output channels accordingly.