I have the Z5 for a couple of months now and lovin it. I have the XBOX-
360 add-on for HD-DVD's and a PS3 for BD now I need something for
SD-DVD's Should I get the OPPO 981 or should I use the 360 add-on
to upconvert. Which one will make the SD-dvd's look their best.

I have the Z5 for a couple of months now and lovin it. I have the XBOX-
360 add-on for HD-DVD's and a PS3 for BD now I need something for
SD-DVD's Should I get the OPPO 981 or should I use the 360 add-on
to upconvert. Which one will make the SD-dvd's look their best.

The PS3 and 360 should both scale DVDs to 1280x720p properly.

DVDs are 720x480p which is considerably less then what you would be seeing from HD-DVD and BD material (1080p scaled down to 720p). Perhaps your seating distance so close to the screen that SD is painful to watch compared to HD.

I think a (effectively) third DVD player is overkill. The 360 plays DVDs directly from its internal drive, correct?