I understand your question.
Let me answer in two points.
First, with high resolution crt projectors, they are so precise that if you don't provide it an high resolution (aka scaled) image, you'll see scanlines (black/empty lines between colors/useful lines) that will distract you.
Also, by getting higher in resolution, you can sliggly modify the picture to prevent aliasing for instance.
Finally, with a matrix-type (lcd or dlp) projector, you
need to scale the source to the resolution of the matrix. This can be done by projector itself, but sometimes it's better to leave the pc generates an image of the required resolution than letting the projector do so.
Second, and this is why the "mystery" subject .. in theory, 720x480 pixels are encoded, so scaling shouldn't improve the image. However, intelligent scaling algorithms associated with high-resolution ready projector makes sometimes people say "hey, watching Gladiator in 1600x1200 on my 9" crt was just incredible, I've discovered details I couldn't see before".
Sounds like the issue "bits are only bits" when talking about sp/dif output. However, even if this works in theory, it doesn't stand the test of reality
If someone want to go on the philosophical side of the issue of scaling "Why can I see more when scaled ?", go ahead
