Hmmm ... maybe I've confused my terms ...
My understanding of "upscaling" is taking a signal and increasing its resolution, like 480p to 720p or 1080p. I believe it also include deinterlacing, 3:2 pull-down, and other video processing chores. This is what I want, b/c I'm taking mostly 480i signals from the game consoles and displaying them with a 720p projector. As best I can tell, only higher-end receivers and pre/pro have this capability, otherwise one has to rely on a dedicated vido processor (like the DVDO products). Depending on how well the receiver or pre/pro upscales compared to the how well the TV or projector upscales, there may be an improvement in image quality.
As I understand it, "upconversion" is taking a composite or S-video signal, and outputting it through a component or HDMI cable. The signal's resolution and whether it's progressive vs interlaced is unchanged. So, a 480i composite input upconverted to HDMI output would still be 480i. As you mentioned, it's convenient for decreasing the number of cables between the receiver and display, but doesn't improve image quality. Most decent receivers can do this, either to component or HDMI.
If I'm barking up the wrong tree, someone please tell me ...
