The upconversion is scaling the PQ to 720P and 1080i on the Yammy. But what type of DVD player do you have? If you have a 2910 then you do not need 2 sorces to upscale your PQ. (there are many DVD players out there that will upconvert to HD, I just ref one mod.)
Both are very nice Recievers. Both have lots to offer. I think you would be better off to see which one sounds better to you. Also check price the yammy is 100 bucks more than the 3806. The Yammy has 10 more watts a chan.
I would say listen...Play around with them if you can. Some say that the Yammy's are more "user friendly" Off the top of my head I can not see any reason to set them apart aside from Personal Pref. (The old Ford vs Chev basically. Which brand do you trust the most, and like the most really)
Both will do you very well