I look at it this way. Sure, the DVDs have the information encoded on them digitally. But the player has to extract that digital information and present it as a picture. And different players will extract that information with varying degrees of accuracy based on the video processing hardware inside the player.
There's no way that a $20 DVD player has the same quality of internal guts as a $300 one. Will you see a difference in picture quality? That depends on your eyes, your display, whether or not your display is properly calibrated, whether or not you've got various settings set properly, and whether or not you care if you see a difference.
As an example on that last point, my girlfriend, who doesn't always care about such things, saw no difference between the picture quality of my old Pioneer 588A and my new Oppo 981. I sure did, though. Minimal, but definite.
cheers,
supervij