I contacted customer service...they referred my problem to their engineers. After a few hours I was informed my problem was resolved. It wasn't. The next day I thought I would troubleshoot this myself. As I moved the stand everything was on away from the wall to start this, the channel I was missing came back and i still have it. Must be connector related I guess.
All LCD Panels are Progressive Scan, so if you feed it an Interlaced 1080i signal it will convert it to Progressive 1080p. Not all LCD panels are 1080p however, some are 720p, but most 40" or larger are 1080p.
Also if your TV is LED that's just talking about the backlight technology, it's still LCD which is Progressive Scan. So for the Nextbox it's best to set to 1080i and let the TV do the conversion to Progressive.