Upconversion can take place at any number of places, and it is incorrect to assume that your display, or the receiver offers the best upconversion.
What is for sure, is that SDTV looks like crap no matter what does the conversion. Most often, cable boxes are set to output 1080i, which means that cable box, with it's own crappy scaler, is already doing the bulk of the upconversion - which is a bad idea.
HDMI, most of the time, looks nearly identical to component video connections. When there is a difference in quality, most of the time it is the HDMI connection which provides the better image quality.
Yet, at the end of the day, if you want the best image, use the best cabling and let the product with the best scaler do the upconversion.
Since the products pretty much have stuck within the Sony family (for whatever reason), check out what type of scaling is in each one, and pick the one with the best scaling. I would expect that running HDMI everywhere, then letting the TV do the job will be just fine considering that it is all Sony stuff.