Joe (6620), I think that Joe F. who just posted kind of lays it out. It's a lot of reading, but what it boils down to is this:
If your TVs are 1080p TVs, then they will automatically convert whatever you send to them, whether it is composite video (yellow wire) or component video (red/green/blue wires) to 1080p inside the display. They do this with internal video processing and scaling that is built into the TVs. It is something you paid for when you bought the TVs and truly mimics what you are doing when you buy an external video scaler like the one you have.
How good of a job it will do is questionable... up to a point.
The one built into your typical TV (ie: Vizio) will NOT likely do as good of a job as a DVDO Edge processor which costs about $250 or so.
I would expect the one built into your TV to do an identical, or better job, than your $70 converter/scaler unit. It is easily possible that it could do a far better job than your inexpensive scaler. Easy enough to check by simply plugging in the Sat box directly to your TV and taking an honest look at it.
Now, HDMI is not the 'best' connection. It is just a connection.
Most people have heard of 'GIGO'. Garbage-in, Garbage-out.
That's a rule in audio/video as well.
If you start with a lousy signal, such as standard definition television, there is almost nothing you can do to make it better, and it certainly will never be high-definition. It's like taking a photograph and making a cheap black and white copy of that photo. Then compare the two. That cheap photocopy will never be the original, and even with a lot of work done to the photocopy there is nothing that can be done to fix it. Now, if you take that original photo and put it in a really good color copier with good paper, the copy you get back will be much closer to the original.
That black and white copy is like standard definition television. You can add some lines of resolution and move it to a HDMI cable, but you can't fix that it is a poor quality image to start with. Not necessarily a 'bad' image, but a long way from HDTV, and there is nothing you can do about that short of going to a HDTV receiver that receives HDTV to begin with.
Now, does HDMI deliver a great signal? Only if it is a great signal to begin with! HDMI does a great job of carrying HDTV from a HDTV receiver to a HDTV. It does a great job of carrying a garbage signal from a low quality source to a TV as well. But, when you get into splitting signals, and routing of HDMI, it is one of the worst possible formats on the face of the earth. It wasn't designed for video distribution, and HDCP threw a big wrench in making it all work properly.
But, analog video, like those yellow and red/green/blue component connections on the back of your satellite receiver?
They can be split, amplified, re-split and juggled about 100 different ways and still deliver an acceptable on-screen image. You need the most basic of splits - a two-way split.
I would recommend this: http://www.radioshack.com/product/index.jsp?productId=4049758&utm_source=Google&utm_medium=PPC&utm_term=1500311&utm_content=Exact&utm_campaign=PLA&cagpspn=pla&gclid=CNCrsrj6lbcCFUm-4AodoBEAAA&gclsrc=ds
That will give you both composite and component video splitting and is only a $40 box.
You should FIRST try hooking component video up directly to one of the TVs to see how good the image quality is. My expectation is that it will be nearly identical to your current HDMI upconversion/splitting setup that you are trying to use and having issues with.
For what it's worth, I run half a dozen TVs on my home using HDTV and I distribute that HDTV with component video and it looks stellar. Only one TV in my home gets a HDMI feed for 3D and HD audio in surround, and the rest get the red/green/blue RCA connections with native high definition sources from FIOS and network video streamers. The Wii, looks like garbage in comparison to the rest.