I've been using a utility called Handbrake to convert a good portion of my DVDs to stream from my Mac to the Apple TV. Surprisingly, using a quality codec such as H.264 or MPEG-4 with a decent average bitrate (~3,500kbps) produces a good quality picture. Is it HD? Seeing how the source is only 480P, obviously not. But the difference between the same movie on standard DVD is minimal, particularly so on my 42" plasma. On my 61" RPTV, probably slightly more noticable, which stands to reason with the screen size increase.
There obviously is going to be a small amount of compression, but using a high quality encoder and minimalizing the amount of compression, quite often you can produce a quality picture in a portable format... -TD
Emotiva UPA-7 | Yamaha RX-A2000 | Mitsubishi WD-73742 | Epson 8500UB | Visual Apex VAPEX9092TN
Boston Acoustics VS 336s, VS 325c, Emotiva ERD-1s (x2) | 15" TC-2000 DIY Sub
Dish ViP622 HD DVR | Oppo BDP-93 | AppleTV v3 | Belkin PureAV PF31 | Panamax Max 4300