HD consoles don't scale games to HD they render them in HD, if you don't use the HD output you might as well sell it and go back to a SD console. It's like asking should I watch HDDVDs in HD or use the SVideo SD output and scale it up to HD with an external scaler.
The Game modes are a feature of the ABT102d SD Deinterlacer, they speed up SD Deinterlacing for SD games. When dealing with HD consoles or any source that is natively HD you're only using the Scaling and switching features of the VP30.
If your display is 720p then just feed it 720p from the console (going via the VP30 as a switch shouldn't make a differance) but if your display is a res not supported by the consoles
rendering modes (not scaling) then either the VP30 or the Display will have to scale it and will add a delay. One may be faster then the other and one may be better looking then the other but chances are the Scaler will do it better.