Blu-ray and HD DVD are both 'next gen' High Definition formats. Both have native 1080 HD images and the ability to include HD audio tracks too..
Standard Upscaling DVD players, offer a good picture from SD DVD's but it is still SD and will never equal HD quality in video or audio.
Most High Def players such as the PS3 (BR) and Toshiba XE1 (HD DVD) offer the same upscaling ability as upscaling SD players, in fact many offer very good SD upscaling.. at least equalling a SD player of a similar price or even more expensive ones.
However unlike SD DVD players, very few are capable of playing Sd DVD's from all regions and will be region coded for SD DVD's.