I don’t think the HDW-500 can accept 720p…. I know you need a special board to output a 720p from a 1080 tape. it’s been awhile since I’ve used one.
on another note… the only official broacast standard 720p format is 720p/60. Even though FCP can deal with 24fps media, you can only technically output 60fps media (basically it just dupes frames like crazy… but since the frame rate is so high, it looks fine to the human eye)…. Even though the Varicam records “24p” it’s still striping the tape at 60fps and putting flags in for the real frames so you can digitize and edit at 24.