Depends on the content: something like western animation, or something like documentaries and news reports, do not really get anything worthy going past 720p and sometimes even that is too much. And even the most blink-and-you-miss-it-scenes series on TV nowadays do not really justify spending 1080p for the entire duration of the episode.

Depends on the playback: If you are only going to watch on your machine / your own phone, you can go with whichever but if you intend to watch on a TV set for example, or if just intend to share the file to other machines in general, x264 has much wider compatibility and stresses the hardware far less.