Your plasma\LCD will scale the out put to its resolution (480p standard Skt Box or higher if Sky+\HD) to the screen resolution.
Upscaling DVD will upscale to mostly 720p or 1080i, and there usually an improvement over a non upscaling player, i use a Phillips Upscaling DVD Player and quality is far superior than standard DVD or PC set to my LCD Resolution.
Can pick one up from £45 onwards, well worth it IMO, i have a 42" LCD and makes a great different. I've not bothered with a scaler for Sky as i have a HD box for Sports and download my Movies and TV Shows in HD