If you have VIDEO CONVERSION set to ON with the "i/p scaler" turned off, it will convert the component video input to HDMI output but will not do ANY processing. So your TV will do all the scaling from that point.
You may find though that letting the Denon scale it to 1080p first provides better results. Note that the SCALING will not affect your picture settings (e.g. color, contrast, brightness, etc) it just changes the resolution of the input signal. So it won't screw up the picture settings you have dialed in if you let the Denon change the rez.
Note that the 2310 can ALSO change these things (color, brightness, etc) but by default these settings are all zeroed out so it will not change the picture at all (other than the resolution) if you don't change that stuff.
Think of it as three separate steps:
step 1 -- converting the analog video to digital video (i.e. component in > HDMI out)
step 2 -- changing the resolution of the video (e.g. 480i > 1080p)
step 3 -- tweaking the actual picture quality (e.g. color, contrast, etc)
The Denon can do any or all of these things. You can do steps 1 and 2 without affecting step 3.