Ok, I have an extra component cable that I can run from the AVR to the tv. So other that not having to use a component cable, what are the advantages of using an upscaling model?
Upscaling is just a feature. It isn't something specific that upscaling models have, but it is the entire package.
Typically, as you get into better receivers they add upscaling as a feature. On top of that, they add more power, more inputs, better electronics, better amplification, better build quality, etc. Some companies, Denon for example, don't include as many features for the money, but are well known for building products with better parts in them. So, you pay more for their product, but don't really get more features that are available to you - but that product will last longer and sound better.
Samsung is one of those companies which I think goes the other way and tries to pack a LOT of features in for your money, but then has poor build quality, so the product doesn't work nearly as long as it should be expected to.
You do have choices, but I would stick with the main manufacturers of RECEIVERS out there:
Denon, Onkyo, Pioneer, and Yamaha. There are a few other choices for quality receivers, but those guys tend to lead the industry - and for good reason.