Yes, Scotty is correct. Many of CRT-based HDTV sets on the market are not capable of displaying 720p. Some of them convert this to 1080i or to another supported resolution, but others simply don't show anything: if you have one of those, 1080i-fixed mode is your only option.
Native mode not only allows you to watch 720p OTA channels unconverted (if the TV set supports 720p resolution), but it also gives your TV set full control over SD channels, so you can stretch or crop them the way you like.
My TV set can convert 720p to its internal native resolution, but I still prefer 1080i-fixed mode because the Program Guide looks much better in this mode compared to Native mode on SD channels.