Upscaling is a much misunderstood and much maligned technology.
It is a long story, but much of what we have on DVD have actually be scaled down from something like 2000P of an original movie on film. This was done to enable us to play the movies on a CRT that can accept a max of 480i.
As digital TVs became popular 720P, 1080P displays became possible, but movie owners did not deem it fit to reprint the DVDs with higher resolution. This would have meant selling DVDs for particular displays and that meant huge stocking and reprinting costs as well as confusion in the retail market. Most consumers have abysmal knowledge of technology, and one could very well buy a DVD meant for a 720P screen , play it on a 480 monitor, and scream. So the software owners stuck to the lowest possible resolution and expected technology to handle screens with higher resolutions. That is how the market for scaling was born.
You have original 1080P only on Blu-Ray media and that will not be scaled when you play on a 1080 screen. All other movies can be scaled for 720 and 1080 screens. Scaling uses complicated mathematics to fill subsequent pixels with information making the screen resolution larger and smoother. But, yes, if you have a Blu-Ray with original 1080 content, it will be better than a scaled version.
Cheers
