Got the Sony NS76 myself and it definitely upscales better than my TV (LG 32" 32LC2D). The screen has PAP so I can do direct comparisons with my previous SD Philips DVD player (via gold plated RGB scart). The picture from the Philips DVD, upscaled by the TV, looks clumsy in comparison to that from the Sony DVD.
I'm sure something like a Sony HDTV does better upscaling than my LG though. I guess it all depends on which TV you have then.
Btw the 360 upscales DVDs via VGA should you have one, so it'll give you an idea whether an upscaling DVD player is worth getting. It's no use as a serious DVD player IMO due to noise and power consumption though.