In the case of the interlaced DVD player, the 480i analog signal delivered via the component video would be processed as follows: A/D conversion, digital deinterlacing, digital scaling to 1024X768, and partial D/A conversion for the LCD display drivers.
In the case of the progressive DVD player, the 480p analog signal delivered via the component video would be processed as follows: A/D conversion, digital scaling to 1024X768, and partial D/A conversion for the LCD display drivers.
The progressive player undergoes one less processing step. The expected result would be less evident interlace artifacts. The degree of improvement would be dependant upon the relative sophistication of the deinterlacing chip in the DVD player versus the pj. In almost every case, the DVD player would be better - if it was an expensive player with the Faroudja chip, it would be significantly better.
Since interlacing artifacts are only evident on moving objects, that is where you would observe the difference - I would not expect the static areas of the image to look much different.
Gary
PS: I think "fierce debate" about the merits of HTPC versus standalone DVD players is an overstatement. To anyone who has actually seen both, the differences in video quality are significant - the HTPC is the clear winner. However, it is equally true that the standalone DVD player is more user-friendly, as a simple remote control with buttons is far better than Windows. Even those who have gone the extra step of implementing HTPC operation via a remote still have to debug configurations - and the remote control application used. Both approaches clearly have advantages over the other - it's purely preferences and priorities.
[This message has been edited by Gary McCoy (edited 10-03-2001).]