Don't assume you need an upconverting player. Much to my surprise, my plain old Toshiba progressive scan looks better than my Oppo on my new 42" Syntax Olevia. While the Oppo has nominally smoother picture, the Toshiba has much better contrast. This was a surprise going in, because the Toshiba always looked exceedingly mediocre on my Zenith 32" HDTV CRT.
So the gist is, don't assume you need to get an expensive DVD player.
BTW, with HDTV, bigger is always better. I don't care about the size of your room or anything else, if you get anything less than a 32" you will just want to be upgrading in the near future. In fact, I don't recommend anything smaller than 37". Remember that you can sit real close to a big HDTV and still get a great picture.