What do you mean Simplink is not working? Simplink is not compatible with Roku. You have to use the Roku remote to control the Roku. LG Simplink I thought was the ability to control one LG device from another. Example is I have an LG BD390 (BluRay) and LG 42LH40 model TV. Basically I can interchange the BluRay and TV remotes. I turn off the BluRay player when the TV turns off and the TV turns on when I turn on the BluRay. Also, the input auto-switches when the BluRay is turned on. I have Roku XS myself on the same TV, it does not interfere whatsoever with this process, but I can't control the Roku from my TV remote. This might be a totally different feature though based on what I am reading about Simplink. Might be there's a specific compatibility via the LG equipment via the Simplink process.
As for the 1080i, Roku does not output 1080i. Only 720p and 1080p. If you have a 1080i TV, with no 1080p, but 720p as options, you have to use the 720p display setting. There is no content on Roku that plays native to 1080i, which is the reason it is not an option.
Roku2 XS, 42" LCD, Ethernet (5.5 b320)
Roku Stick HDMI, 32" LCD, WiFi (5.5 b2027)
Roku N1000, 25" CRT, Ethernet (3.1)
Router - Linksys WRT54G2
ISP - TWC - 50 Mbps/5 Mbps