See Video2000 and Betamax versus VHS back in the day.
See, that's the porn industry right there. Seems like Microsoft didn't cater to the right crowd

what exactly does approximation mean lol? And btw since it can play divx videos will those play in hd like they do on lcd comp monitors?
"The upscaling process does a good job of matching the upscaled pixel output of a DVD player to the native pixel display resolution of an HDTV capable television, resulting in better detail and color consistency.
However, upscaling, as it is currently implemented, cannot convert standard DVD images into true high-definition images. In fact, although upscaling works well with fixed pixel displays, such as Plasma and LCD televisions, results are not always consistent on CRT-based high definition televisions."
It means they assume that upscaling directly performed by the DVD player is better, because it can work with the real binary data and doesn't have to use analog data that the TV would use if you connect the DVD player not via a digitial option.
Usually stuff will not play in HD if it is not HD. Kinda like sand isn't ice cream except you swap the sand for ice cream! Similarly, where would the extra pixels (with extra information) come from, if they are not in the original source? You can upscale all you like, but it won't make the picture magically have 1080p/i where every pixel can have different (non-interpolated) information.
I used Irfanview to resize and rescale images obtained from a HD 1080p source (Shangri-La). I then rescaled it to 704×396 which is roghly NTSC 16:9 anaglyph (it would need bars on the top and bottom of the video source to present 16:9 on that format).
[click on pictures to enlarge]
Original:

Lanczos filter (slowest):

Triangle filter (second to fastest):

Hermite filter (fastest):

Now, I'm not sure what filter TVs and DVD players use, however, it has to be fast because they can't have that overhead every frame, so you can pretty much rule out Lanczos IMO, though I don't know what awesome super machines exist on the market. You will notice that all of these look blurry. Lanczos is the best, obviously. It is "just" smeared, but still looking good for something coming from a standard DVD, if it were. Triangle looks a lot blurrier, especially noticeable on the text, the birds and the steel girders looking out of the building on the right. Now, with Hermite filtering, you also get a blurred image, but it is much more pixely, you can pretty much see every pixel by looking at it.
Now, none of these looks awfully bad, but this is just one frame. Imagine each frame (and you get 23~25 of these per second) is upscaled like that. The result will look overall blurry, pixely and might have weird color gradients on some surfaces due to taking the median of surrounding colors for "new" pixels.
I would like to point out that the subtitles were part of the original image source, so they would appear as shown.
I hope you see how it is impossible to get an HD-like experience from low-res sources. You can get the resolution, but that is all there is to it. You cannot match the detail because there is simply some data missing that would be on a BluRay.
cYa,
Tauwasser