I have a 1024x768 Panasonic Plasma (so 720p) and the difference between Blu-ray and well-upconverted DVD is immediate. A trick I frequently play to guests is to put my Blu-ray copy of Lost III and put the DVD in my good upconverter (BD-30). As they marvel to the picture from the BD-30 (which IS very, very good), I then switch to the PS3 running the Blu-ray version of the same episode without telling them ("oops, sorry I pressed on the wrong button!").
And then the comments vary, but the midlest I ever heard was "Hey Dude, I don't know what you did, but... it looks better. Like... I don't know... static free".
In other words, the difference is quite visible. Is it worth the price, that's always one for budget and priorities in life! For me it is without the shadow of a doubt.
