Michel welcome. All present DVDs are 480i, so yes, no DVD player uses the "full potential" of a 720p native resolution display. The 480i information coming off the DVD has to be deinterlaced from i to p and scaled up from 480 to 720 so that the 720p device will display a full picture(but this still isn't a full 720 resolution as from a 720 source). If the player or receiver doesn't do this the projector itself will deinterlace and scale up to 720p. Unless a more expensive player would happen to do a visibly better job of this than the projector, it wouldn't necessarily result in an improved picture.
