The Oppo wouldn't do any conversion because, if it is a BD-Live disc the interface will present itself as 1080p.
Well, got mine, been using it for about an hour. It's pretty cool.
I was wrong, it doesn't present itself at 1080p, the interface is 720p. It is indeed a Blu-ray Disc though. The interface defaults to showing your streaming queue, but you can browse all the available films by genre. It supports both SD and HD streams. When starting a SD playback the disc switches to 480p, HD stays at 720p. So if the disc does work in the Oppo, it would scale the video content, as it does BD bonus content (which the PS3 doesn't scale).
The video streams are AVC (H.264), with 2 channel Dolby Digital @128kbps. I've seen the video rate jump as high as 7 Mbps, but averages 4 for HD, and 1.5 for SD.
All in all, I'm impressed. Going to go watch more.
Additional: The pause button brings up a nav-bar which works pretty much like the cool one you get with the Silverlight version of the player on a computer.
