VGA is generally fine. I use both HDMI and VGA on my monitor and switch between the two all of the time (1920x1200 @60Hz). The only real issue with VGA is that it is an analog signal, which means that if there is anything near the system giving off a lot of electromagnetic interference (EMI) then you can end up picking up odd noise which can degrade the signal. This EMI is typically not noticeable on normal 3-5' VGA cables though, so it is not typically an issue.
The big deal is 720p. It is fine for video, and OK for games, but anything with text is going to be painful to read for long periods of time. The resolution is going to be much more of an issue than anything else... well, that and whatever the quality of the panel is in the first place.