That is not correct. The set-top box outputs only a single resolution, regardless of whether you watch a HD channel or a SD channel. Thus, very obviously the player does upscale the SD channels. Whether the upscaling is good or bad, is an entirely different issue. Also, due to the scaling to 1920x1080i the SD 4:3 picture gets stretched. This issue can be resolved by setting the set-top box to output the picture with pillar boxing. I assume that the TataSky set-top box has the feature. The SunDirect HD set-top box has the feature. The Dish TruHD box on the other hand, has the option in the menu but like so many other things with Dish TruHD, it does not work.
Could you pl help me with some settings I can do on the TS HD STB to make the TS HD STB not do the upscaling and leave it to the Tv to do. could not find a option.. the only option I got was under HD tere was selection for 720p and 1080i output.. selecting either did not make any visble impact on a 42 inch HD Tv that I have.. maybe on bigger screen size the 1080i may look better PQ than 720p... not sure though.