I think its best to discuss the upscaling of 1080p to either 4HD or 4K separately from how that upscaling is displayed (whether by a native 4HD, 4K, or 1080p panel by e-shift).
The scaling needed is quite different for each. Right now the JVC can only accept a 1080p or lessor resolution for deinterlacing if needed and scaling which would always be needed here. The scaling needed is an end result that results in two different frames that when flashed in rapid sequence with one of the two frames e shifted, tricks your eyes into thinking that you are seing 4HD pixels all at once. A very neat trick and I am not using the word in a negative sense. All video is a bunch of tricks to fool one's eyes. Film of course is such a trick. The two sets of pixels in each frame overlap and your brain sees 4HD pixels. The upscaling has to be quite unique and has to result in overlapped pixels that come out laying in intensity etc at the right values and that must mean some adjustment to each set of pixels in the two frames being flashed. The generation of the two frames is said to be a processing and extraction of the 4HD once the HD is scaled to 4HD by the JVC initially. Right now the JVC cannot accept 4HD or 4K in. Next year one would expect it to be able to. Obviously when 4HD source material becomes available in the future it could cut out part of the processing needed for e shift display from three 1080p panels. The JVC would however still have to generate two appropriate 1080p frames to flash and e-shift. However, right now I think there should not be any bemoaning that the JVC can't accept a 4HD in from some scaler in some other unit. The trick here is the generation of two 1080p frames for e shift display not particularly the intermediatary step of getting a scaled 4HD frame for the two frame extraction.
Any true 4HD panel of 4K panel requires scaling for any resolution below the panel's resolution and will accept the native resolution up to a frame limit of its input chips. Right now Sony can only go to 4096 x 2160 at 24 frames. Later when the chips come and that will be in the near term, a board can be changed to allow 60 in. Near term doesn't mean this year but relatively soon. The question as to where the scaling should take place in the chain is simply what component has the best scaler. A relatively cheap component such as an Onkyo component (gussied up as the limited distribution Integra line) or the Sony integral to its $25K MSRP projector? Now when a company like Lumagen comes out with a 4HD or 4K scaler it could beat the Sony in quality. Lumagen's scaling to 1080p clealy beats Sony's scaling to 1080p now.
Now to panels. What is inherently better, flashing and overlaping 2 1080 panels or having a true 4HD panel or 4K panel? Obviously there has to be some degradation of the 1080p image going through the e shift element but I would expect only a diminimus degradation. I hear its very high quality and it does no shaping etc. Its basically a high quality pass through (so to speak, a unity gain device) that shifts pixels 0.5 pixels over and down when energized.
But clearly I think intuition tells us a true 4HD panel or 4K panel and the observations of some who have compared both would result in an even better picture and I would expect JVC to bring out consumer true 4HD or 4K panel machines within a few years. But look what you get now for relatively low price consumer machines (two machines at MSRPS of $8K and $12K with of course lower streets). Its makes 4 HD display (but not sources which aren't available anyway) available to a lot more who can afford that but can't afford the Sony. Pretty neat stop gap IMNSHO.