Ok since this post I have done some things. The first post was with everything hooked up to my 51" Sony RearProjection HDTV. I've since moved everything to my 32" Sony LCD and have noticed this:

LCD and normal DVDs DON'T MIX!!! LOL, at least no on the 360. It was painful to say the least. However HD-DVD and LCDs make sweet sweet love. Very good image. Still MI:III takes it for me but KK look a ton better on LCD in HD over regular DVD.

Now here's the kicker. On my rear projection I'd have to say that the set, 360 or something seems to be upconverting regular dvds and doing a DAMN GOOD JOB of it. The LCD I'd have to say beat out all in HD-DVD but the rear projection did a good job with it as well and did an OUTSTANDING job with normal DVDs over the LCD. What does this all mean? I have no clue but I just thought I'd update you guys on what I've been seeing.

Just for FYI the rear projection is 1080i native (at least to the best of my knowledge since Sony was kinda tightlipped as to actually what they sets were a year ago and more) the LCD is 768p native.