IMHO, upsampling is over-rated. Most HDTV monitors do this already, so there's not much point in it. It's still a 480i/p picture anyway. The only real advantage would be if you have a monitor that gains some little bit from using the DVI/HDMI input. But I seriously doubt you would see any difference on a DVD video unless, as I said, the monitor is not displaying component input correctly. (or you have the picture settings messed up)

As to the "protected DVD's" issue, I wonder if this is something to do with the DRM flags for digital content like HDTV has. They don't want you making digital copies. Could be that all DVD players will have this eventually.

Anyway, if you can see a difference between component input and DVI on a DVD video, you have better eyes than I do. I can just barely convince myself that there's a difference on HDTV sources. (there is, but it's small)