silentnight792:
I am not familiar with your Sony. However, if you connect an upscaling DVI-output DVD player to the DVI connection, what you are doing is eliminating any digital-to-analog and analog-to-digital artifacts and noise introduced by the DVD player. You simply hook up the DVD player to your DVi input and the TV can't tell if it is a STB or a DVD player. The TV's scaling circuits aren't involked. Any reduction in D/A and A/D conversion results in an improved image.
HOWEVER, not all displays benefit equally from an upscaled DVI input. You should look at the Bravo D1 review in Widescreen Review (Oct, I think). In that review, there is a discussion of the relative merits of DVI for different display technologies. While all displays will benefit, fixed pixel displays (e.g., DLP, LCD, plasma) benefit the most. You will then have to decide whether or not an upscaling DVI-output DVD player is worth it to you.
There is a new "crop" of such players beginning with the Bravo D2 in February.
I believe JumP's reading of your Sony's capabilities are based on hooking up the DVD player to the DVD connection on the back of the TV. In that regard, he is correct but you wouldn't hook up a DVI-output DVD player to that input - you'd hook it up to the DVI input.