Yes, I've read many comments about user's not pleased with the results of upconverting throught the components. I can tell you that through the DVI connection, I've experienced none of the problems your friend has...the image is sharp and crisp and it didn't cut off any of the picture. But keep in mind that I'm upgrading from an ancient Sony, so your mileage may vary... I will do some tests running through both DVI and the components and let you know the results...and just for fun, I'll keep the ol' Sony as my "reference" player.

And I suspect that my happiness with 720p is the fact that my DLP's native resolution is 720...1080i would most likely be downconverted to 720("i" or "p"?).

Also, there are many firmware upgrades out there that fix a variety of symptoms...but none that fix ALL problems...for both DVI and component outputs. See this link for further info.