If you got that Mac 30" monitor with the Dual DVI link you are one lucky dude.
The answer is yes, it upconverts. It has to upconvert to match the screen's resolution, just like an HDTV. The TV may receive an analog signal, but it has to scale it to full resolution.(if I am wrong, then someone please correct me)
With computers you can have different software type scalers with different media players.