Whether you should upgrade now or not depends on what movies you want to see (it is only useful if they are on Blu-Ray), and whether or not you expect a better player to be released in the near future that you would rather have than the currently available models, and whether or not you are willing to pay more to get movies on Blu-Ray instead of DVD.
720p is significantly better than 480. DVD simply is never going to look as good as 720p, even if you had the world's greatest upconversion for it, which I doubt is the case with your player.
To get an idea of the difference, if you have a TV antenna and can pick up HDTV stations, compare a 720p broadcast with a digital SD (480) broadcast, and see how much difference there is.
Of course, I am assuming that you are not sitting too far away from your set for the difference in resolution to be significant; see:
http://www.carltonbale.com/2006/11/1080p-does-matter/
http://www.soundandvisionmag.com/assets/download/0602_tech_talk2_large.jpg
If you are sitting 18 feet away from your TV, then it won't matter whether you are looking at a DVD or a Blu-Ray, but starting at about 17 1/2 feet, a 720p signal will look a little better, if you have 20/20 vision. This means, of course, if you want your DVDs to look like they have "perfect" resolution, you need to sit almost 18' from your TV!
With a 50" 720p TV, to see all of the detail that is displayed (with a 720p signal), you need to sit about 10' from it.
If your TV were 50" 1080p, you would need to sit about 6 1/2' from it to see all of the detail from a 1080p signal. The problem with doing that, of course, is when you look at something that isn't 1080p, because sitting that close will reveal the lack of detail in lessor sources.
In my case, I have a 42" TV, and I sit about 8' from it, which is approximately equivalent to sitting 10' from a 50" TV. Given what DVDs look like, even with my great Oppo DV-983H upconverting player, I do not want to sit any closer. The lack of detail bothers me. Of course, some people don't mind a picture blown up way beyond the limits of its resolution, and they obviously will feel differently than I do. I would rather have a small picture that is clear, than a large picture that shows that the detail is lacking.
