There is definately some confusing stuff going on here.
I would think if you have a 1080p TV, and you have a 1080p BD/HD player, playing a 1080p source DVD, you will have a much more detailed image than say a 1080p TV, recieving a signal from a 1080p upconverting player, playing a 480p source disc.
A DVD (source material) encoded is 480p is not going to contain the same level of information as a BD/HD DVD encoded in 1080p, and no amount of upconverting is going to make the 480p DVD look as detailed and crisp as the 1080p DVD, provided the 1080p DVD is really a native 1080p transfer not a 480p image upconverted to 1080p.
I guess my point is the components are like a chain, limited by the weakest link. I don't think it makes much difference where the image is being converted, whether that is in the player or the TV if the limitation is still the 480p encoded source material. Might as well stick with a 480p player and save your money to buy 1080p BD/HD player and 1080p BD/HD dvds.