all these new fangled HDTV's have their own, built in upscalers.
They take whatever signal is fed into them and "upscale" it into it's native resolutionm,wether it be 480, 720. If the TV's native resolution is 1080, by the time whatever is fed to it, by the time it hits the display, it's been upcscaled to 1080.
Now, these upscalers can be of varying quality.
If you but an upconverting DVD player, and it's upscaler is of a better quality the one in the TV, then you might realize an improvement. I f not, well, then you won't much of see a difference, if any.
Don't feel too bad, though. I bought an upscaling DVD and was less than overwhelmed myself.