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Why would I buy a $100 upconverting DVD player to convert the 480p to 720p when my TV does that conversion anyway and I would expect the scaler in the TV to be better than that one in the DVD player.
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You are correct, except that it is not a safe assumption to expect the TV's scaler to be better than an outboard scaler. It depends. Often, consumer displays may have fairly mediocre scaling/deinterlacing capabilities. Some upconverting DVD players may also be mediocre. But some are unquestionably excellent, as well as many very high-end standalone scalers that easily cost more than your display. If the display's scaling is of high quality, and higher quality than any outboard scaling, then there is no benefit to having an upscaling DVD Player if you're just going to let your display handle it.
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I understand that the upconverting DVD players give you full digital link to the TV, but there is still a D-A conversion happening before display.
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That is a distinct question from upscaling players. If you're going digital out to the display, presumably it stays in digital to the display. Depending on the type of display, it may stay digital the entire way (as in DLP).
