To be perfectly honest the only way to determine what's best in your situation is good old fashioned trial and error--try all the various permutations and use what looks best to you.
That being said it's usually the case that the fewer scanrate conversions in a signal path the better. For this reason I'd set the receiver upconversion to 1080i rather than 720p since the native scanrate of your sxrd is 1080i. That way you're doing only one scanrate conversion between the dvd player and the set, not 2, and the set need only de-interlace.
That being said it's usually the case that the fewer scanrate conversions in a signal path the better. For this reason I'd set the receiver upconversion to 1080i rather than 720p since the native scanrate of your sxrd is 1080i. That way you're doing only one scanrate conversion between the dvd player and the set, not 2, and the set need only de-interlace.