Upconversion
Jay,
Any fixed pixel display (LCD, Plasma, Front/Rear Projector, etc.) will convert the incomming signal to its native resolution (720p in the case of the Optoma HD72). The reason for an upscalling DVD player is that you can feed the display its native resolution and some players like the Oppo have much better conversion chips than the ones bulit into the display.
Also, check out the beginners section of the site for plenty of good articles on A/V components and systems.