Coupla things..

"My question is that I read that it converts everything to 1080P 120Hz for display."

120hz is not the fixed refresh rate.
This setting SHOULD be accessable via thw menu. Be aware that this sort of refresh in Samsungs terms, is interpolation.
If you head to the DTV forums (HDTV and capable displays), there has been some serious discusion about Samsungs reference to refresh, when in fact its refering to interpolation.
I kicked up a huge stink because they were misleaing the public. As opposed to doubling the frame, or even tripling the frame to fit within the 120hz, they woudl interpolate each frame. Sadly the interpolation engine wasnt the best and had many isues.
These were on the LCD units from the F series onwards.

Be careful withn the settings to ensure you dont have it cranking too high, else you will see some image degredation.

As for converting to progressive, every LCD, Plasma and DLP must do this. even with a 1080i signal, its still processed with field interpolation. In an ideal world, we'd be filming and watching in 60fps@1920x1080p... but we dont.
I have to admit, the Sony deinterlace method for frame interpolation isnt the Best. I know because i returned 3 X series Bravias simply because the interlace combing was so noticable. ))

Are all the manufacturers going to this?

((I guess it depends on demand.. these days people dont look at contrast ratios, black levels or viewing distance, which is what they SHOULD be lookin for when considering a panel/projector. Instead tehy look at wow factor rubbish which is sadly driven by the consumerism of the technology market))

I know that the 120Mhz LCD flat panels are the rage now
((They are.. and most units today, offer incredible image and value for money.. ))

If so, should consideration be made for creating everything in Progressive?
((I do, simply because i prefer to shoot with the highest possible canvas/resolution. Sadly Vegas mishandling of progressive is making me rethink my options.. For SD, progressive is fine, for HD, i might need to stick with Interlace))

Or does 60i provide the best basis for a 120Hz signal?

((It depends on the viewer... if its just yourself, i would say run some tests side by side and consider the differences...
Just remember that if your doing this for business, not everyone will have 120hz capable machines.. (those in Aus, will only get up to 100hz in case their wondering.. ))

Does anyone know the technical trends we should have the heads up for? 120Hz is a surprise to me.

((LOL OK, like i said in the first paragraph.. in samsungs terms, 120hz motion plus is not strictly 120hz. Yes it refreshs that fast, but theres also an interpolation process involved. The footage WILL look like interlace (ie carry the motion cadeance of interlaced) regardless of the source (progressive interlace)
Image DOES look the shiznit (can i say THAT?) but in the end, what the display is doing is creating new frames within each refresh cycle... ))

120Hz progressive from 24P, 30P, 60i where does it get the in-between data? Does it really work, or is it a fad?

((This si where interpolation comes into play.. some units DO do this.. however theyre only doubling the field/frmes, so it makes no difference.. the only time it DOES make a difference to the human eye, is witih interpolation.. Had to samsungs website and search 100hz motion plus.
This is pretty much how it works..
Ive go a samsung F8 46' panel.. cant fault it now, due to the FW updates, but when i got it, i wanted to throw a brick through it.. ))

Good luck..