It's all about clarity. Upscaled DVDs can NOT compete with a Blu Ray or HD-DVD. They do a good job but Blu Ray and HD-DVDs are encoded at a much higher rate than regular DVDs. DVDs are what - 480P vs. HD discs at 1080P.
I can think of an instance where I watched 'Tears of the Sun' on Blu and regular upscaled. You can see a lot more clearer, sharper images. You can read nametags and the like.
However, here's the rub - does it matter to J6P? No. He wants to watch movies - and look out - HD-DVD offers the same experience as Blu BUT since it's dead, don't expect to see newer movies on it. If you find several films on HD-DVD that you want to see in HD, and don't want to pay a lot for Blu, HD-DVD is a good alternative.
I will admit, I was close to snagging a Blu Ray player for cheap for my bedroom LCD - I have my standalone HD-DVD player there too. I am also going to buy another HD-DVD add-on for the 360 - maybe 2 of them. I have no plans to get rid of my HD-DVD movies anytime soon.
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