There are three things in the chain that can perform upconversion:
1) Player
2) Video processor (independant or built-in receiver)
3) HDTV itself
All of them have chips that varies greatly in quality. Buying the best chipsets for all 3 is redundant. Typically, the best solution is 2), but it is more expensive as it has to take a lot more potential inputs. The player is usually the least expensive to equip with dandy chipsets as it is only dealing with known formats (the ones supported by the player) and in advance (it can take advantage of knowing the frame rates and interlace stuff in advance).
