An up-scaling device basically tries to 'enhance' a standard definition picture by using a best guess algorithm to 'fill in the banks' if you will and produce a HD signal to send to your TV.
For instance, the up-scaler in my AV receiver will take standard def TV (480i) and regular DVDs (480p) and upscale them to 1080i which is the maximum that my TV can handle. I assume it would also try to upscale a 720p HD signal to a 1080i HD signal but some would argue that that this is not worth the effort and could possibly be, in fact, detrimental.
I can tell you that I 'think' I see a Difference in standard def TV but it can't work magic. Shows poorly filmed still look poorly filmed.
DVDs definitely show an improvement. However, I think it is the upscaler in my Toshiba HD player that is doing the trick as it upscales it to 1080i at the source so the receiver wouldn't do anything. I say this because I think I see superior results when I use my Toshiba player vs. the PS3.
All HD sources, HD TV, and Bluray look great. The Bluray of course, would not be upscaled. Again, poorly produced sources will look worse than stuff well filmed or made specifically for HD.
