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This may be a dumb question but does 360 upscale old xbox games to 720p or does it actually render them in 720p using software emulation?(a-la Bleemcast with PS1 games) 

In preparing for Ninja Gaiden 2, I purcahsed and downloaded Ninja Gaiden Black on the 360. I remember this game being 480p and being very good looking on the xbox but now it looks much much cleaner on the 360(which is uncharacteristic for upscalling).

I'm actually stunned how good it looks on the 360 as it looks cleaner and sharper than a lot of actual PS360 games and is visually miles better than any Wii game I've ever played.

So yeah, does someone know if this is this being upscaled or somehow actually rendered in 720p?