If you have a 1080 sequence and put a 720 video in there, you’ll have plenty of room and black around the edges. Scale up the 720p some and have letterbox, you won’t detect the tiny, tiny quality hit from doing this.
We use 720p footage in 1080 edits a fare bit and no loss for wear.
Just my .2 cents worth.
Chris Tompkins
Video Atlanta LLC