Originally Posted by Doug Blackburn
Every device that up-converts 480 to 1080 SHOULD convert the SD color to HD correctly, unfortunately very few (perhaps very very few) do it. Most do NOTHING but up-convert and you are left with a problem that annoys me quite a bit... reds from SD sources (like DVD) that are noticeably too orange. This is easiest to detect with familiar colors of red... London buses, Coke advertising, American flag red, Stop signs, etc. Other colors are affected as well, but I find the reds are much easier to spot as being a problem than anything else. There are few video displays that have selectable SMPTE-C and Rec 709 color matrix settings (some Sony XBR models have had that setting, don't recall it in other displays but there are probably some others).
I agree with you 100%, I think they should twist the colorspace, however many don't. And some influential people argue the contrary because there are 601 and 709 flags, but realistically nobody uses those and they aren't read by anything I am aware of, so it's kind of a theoretical argument. Which is why manually selectable decoding is an excellent failsafe for either case.
However it is important to note that you mean Rec 601 and Rec 709 color matrix settings, NOT SMPTE-C vs. Rec 709 which is a color gamut difference which is altogether unrelated and an entirely different can of worms!