A normal DVD looks noticably better when played in a upconvert DVD player.
HD DVDs look even better.
Like RCM78 says, that TV should display 1080i resolution via the component video cables. See page 2.8 - Here's a link to the
manual
and a link to the
Toshiba HD-A3 - 720p/1080i DVD player - $182 shipped + 5-7 free HD DVDs
It was released in Nov 2007 as an improvement to the HD-A2. This DVD player will also display what resolution it's sending to the TV. Lock it in 1080i and enjoy.
Only drawbacks to this unit is the bootup time. Turn it on and wait about 1 minute before you can do anything with it. I hear that's the same with most of the HD / BluRay units. Older ones apparently take longer.
good luck and Merry Christmas!