Newer sets will tell you the resolution of the signal they are receiving when you switch input sources.
My PC has an GeForce 8600GTS card with 512MB of memory. It also has an LG BD/HD combo drive.
If I understand you correctly, the software has to support upconversion for the hardware to actually do the work.
I have not seen anything in print that says PDVD7 upconverts. I did see mention that WINDVD9 does. Does that mean PDVD7 doesn't? I don't know. I have also seen, in print, that Pure Video upconverts. If I were to use the Vista Media Center Decoder Utility and change the default decoder to nVidia from the standard Microsoft decoder it should automatically upconvert when using Windows Media Player. Am I correct in my thinking?