It varies according to provider - T-Mobile caps the free video to 1.5 Mbps, and whatever your provider can do with that is up to them. Some Netflix videos are now 720p, because Netflix figured out how to compress them more efficiently to get under the 1.5 Mbps limit. That data rate always allows enough for 480p (DVD) quality video. Myself while I do notice the video is a bit fuzzier, it doesn't bother me, especially since it's free. And T-Mobile allows customers to turn the feature on or off as desired, so if you want to watch something in HD you can, but it will use your data plan.
As others have mentioned, DVD quality on a 5" screen is fine with me. It's an imperceptible difference to the 4 other users in my family - though to be honest, I do notice that it's not true HD - especially when compared to watching HD, 60fps MLB.tv via WiFi. But given the choice of monitoring our viewing to make sure we stay under caps or watching anything anytime anywhere, I'll take the the latter.
One area that I have not tried, but I'd like too - is to stream via Binge-on to Apple TV and watch it on the tv. That's where I think you'll notice a big difference in Binge On quality vs. full HD quality. But, obviously, that's specific and special scenario....
I see no difference using my mini I pad when I am at work. Besides if I hook my I pad up to a tv using hdmi adapter , I get 1080p out put. Looks great. I have had T- mobile for years and it is now paying off big time with the binge feature and unlimited data plan.