Any fixed pixel (LCD, DLP, etc.) display will automatically upconvert or downconvert the signals it accepts to its native resolution.
A friend of mine has a 26" Magnavox with a built-in DVD player that she loves. I haven't seen it. She watches HDTV via OTA.
My personal prejudice says that the Panasonic will have better PQ and upconversion than the Magnavox. Any reason you're not considering Samsung (price?) or Vizio/Olevia/Westinghouse? What size display are you going for?