Yes, of course there will be improvement. Whether it looks the same as 1080p, well, its not 1080p, but it may or may not look as good to you.
The difference you perceive will also be dependent on how close you sit to the display. However, I confidently predict you will notice a significant improvement.
Select 1080i output on the BDP, as using the native resolution is best. (assuming your tv is natively 1080i)
