Your PJ is 1024x768 (4:3 aspect), Hidef is generally accepted to be 720 (or more) lines in 16:9 aspect. When displaying a 16:9 image you'll be using 1024x576, that's the bad news, the good news is 1024x768 is going to be easy to get your PC to drive with a good stable image.
You could use component (the ATI cards support a component breakout box), but the PJ would have probably have to scale (it's component mode is likely to only accept standard broadcast sizes). So, it'd cost you more and give a worse image. And, as it uses the same port on the PJ (I think the 6210 uses a component converter to the vga connection) the only advantage I can think off is being able to re-use an existing cable. But even then I'd replace it with VGA for this.
The PC will indeed upscale any DVD's to it's native resolution.