Venkat and others can correct me if I am wrong, but from my reading this is what I understand
1) Your HDTV already has a scaler.....that upscales and downscales as necessary, to give you the best picture possible. A full HD TV will upscale all signals other than 1080p, an HD Ready TV will upscale signals below 720p and downscale signals higher than that.....that should at a base-level be sufficient to upscale whatever SD material tha tyou have.
2) In addition to this most DVD players these days days (and I think almost all of them which have HDMI output) will upscale. Some will upscale only pu to 1080i, but many of the latest ones will upscale to 1080p.
Yes, upscaling, can be done by the DVD Player, the AVR or the TV, Only thing to remember, is that all TVs, even, if they are FULL HD compatible, need not necessarily upscale. When A TV spec says Full HD, it means it can accept and display 1080p signals at 1920 x 1080 rsolution. Manufacturers may leave out the upscaling capability to keep costs low.
So already two devices are there doing the upscaling. Technically speaking, there shouldn't be a need to have your AVR do the upscaling as well. However, if any of your components has a Faroudja chip or some very fancy upscaling chip.....then let that device do the upscaling, because that will do it better than the others. Even otherwise you can compare the upscaling being done by your TV, DVD player and AVR, and see which does it the best.
Also, logically it would seem that a single scaling operation (up or down) should be better than multiple scaling operations, does that make sense?
Initially upscaling was available in very expensive components such as DVD players and AVRs. Most of the TVs did not have upscaling built in. Because of competition, the upscaling feature is trickling down to literally all components. Upscaling will continue to be available on both DVD players and AVRs. As Blu-ray or other alternate formats become popular, DVD players will need the processing capabilities to decode these high resolution formats. Providing the upscaling when you can decode HD format should not be too much of an issue.
If you have multiple components with upscaling engines, as I have said before, you must individually try the upscaling feature of each component and then decide which one you like.
In most house a, AVR is becoming a central processing unit for audio and video. So most people will prefer that the AVR does all the processing including upscaling. The advantage is that you can connect multiple sources to the AVR and know that it will all be scaled up to the best possible resolution - be it one or more DVD players, a set top box, a satellite receiver, and now, video from the Internet. Similarly you can keep a AVR in the HT room, and drive a TV in you bedroom. Here you may buy a cheaper and smaller TV that will again be driver to its max capabilities by the AVR.
I have a rather silly question related to viewing SD on larger LCD/Plasmas where one can perceive the deteriorating quality.
1. Do these panels provide a way to reduce the size of picture displayed (kind of -ve zoom). Say a 42 inch LCD/Plasma displaying only in 29 inch area.
2. Also if this does exists how is the pic quality - similar to a 29 inch CRT? (At least)
Oh, how I wish this was possible! Unfortunately the freedom to set your screen size is available only on computer monitors, and digital TVs that are driven by a PC. Though the panel perse can handle display of of any size in any part of the panel, the TV receiver does not have the processing capabilities to do this. Some TVs had this feature called PnP or Picture-in-Picture. While watching one channel, you can have a smaller screen that you can use to surf channels to see what other programs are running. But for some reason this was not very popular, or manufacturers decided it was not worthwhile pushing that feature.
The concept of upscaling has been brought in so that you do not perceive any deterioration in quality. If you have a decent DVD player or an AVR, you should be able to get very good resolution even with SD DVD. We will discuss this elsewhere, but the media is not the culprit for poor resolution. I am talking about the technology, and not the quality of the media contents. if you use a badly copied or pirated print, no upscaling from any component can help you.