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Hell yes it's worth it and it makes a huge difference, at least in my eyes. I thought the DVD of The Departed looks like absolute shit on my 1080p 37" LCD TV even from 8 feet away. It's a blurry mess. But reading a couple reviews of the DVD version, I found out that people thought it was an excellent transfer. Really? I was under the impression that it absolutely sucked.

So for me, it's definitely worth it.

Pretty cool comparison of LOTR HD vs DVD:
http://www.cornbread.org/FOTRCompare/index.html

A ton more detail, much better colors, much better black levels, etc.