squeezing that turnip:
Technically, the HD TV sets do up-convert the lower resolution video before displaying it on their screen.
I won't argue whether some sets do it better or worse than some external boxes.
I have a cheap DVD player that can put out 720p, 1080i, or 1080p signal, all of which look quite striking.
BUT, one of the secrets to getting FTA signals, regular DVD video, or other standard resolution sources to look better on an HD TV, has to do with careful adjustment of the TV.
I'd read this before and was uncertain, but when I got my first HD TV, all the standard def inputs looked terrible.
Careful adjustment of brightness, contrast, and sharpness, improved them considerably.
(the TV remembers all these settings independently for each input!)
Ya can't get back what you lost, but you can make the most of what 'cha got.