The AVM50 includes a
very sophisticated Gennum-based video scaler, also offered on the Statement D2. There are some pretty sharp folks at AVS using those two processors who can offer better insight into how the picture quality compares between sources and how to set it up optimally for your display and sources, but I can offer a basic capsule summary.
1080p sources would not be scaled by the processor, unless you have a custom video output resolution defined (such as a 1024x1024 fixed-pixel display, so that the AVM50 converted the incoming signal to that
exact resolution). Other sources (480i, 480p, 720p, or 1080i) from analog (s-video, composite, component) or digital (HDMI) inputs would be scaled and deinterlaced as necessary to achieve the defined output resolution. The key to
any video scaling is a question of quality. Your HD display has a native resolution (CRT's are a little flexible here, but they're a dying breed and everybody else has a specific display resolution), and any signals not coming in at that exact horizontal and vertical resolution must be adjusted so the TV can display them. TV's include scalers to handle this work, but they aren't necessarily
good at it. That's why standalone video scalers came into existence and why companies began making upconverting DVD players - they are offering an alternate location for some or all of the video scaling and deinterlacing to be performed. This is very useful for DVD's (a 480i native resolution) and mixed HD content (broadcast at both 720p and 1080i, with a bit of 480p or even 480i mixed in here and there on sub-channels and standard digital cable/satellite channels), as there is the likelihood for some extensive video processing required between source (disc or original signal from antenna, cable, or satellite) and display.
In the case of a Blu-ray or HD-DVD player (particularly if we're talking about an HD-DVD player with 1080p output, which early players don't offer) and a 1080p projector, the goal would be to do as little as possible to the signal since you have a native 1080p signal on the disc and a 1080p display. In this case, the Gennum chip in the AVM50 is not going to be doing much (if anything at all) for you. In the case of other sources, the Gennum would become much more useful. With DVD's in particular, I'd recommend
against an upconverting DVD player as even the best are not going to be able to do as good a job as the Gennum. You'd be better off with a player like the OPPO 970HD set to provide an un-manipulated 480i signal straight from the DVD to the AVM50's Gennum chip. This capability has made the 970HD quite popular among AVM50 and D2 owners, from what I've seen in the forums.
Since you also mentioned the Model 990, I'll finish by saying that you could get a very good standalone video scaler (the
DVDO iScan
VP30 comes to mind) and a Model 990 in place of the AVM50 for around $3000 and have a very impressive setup plus a couple or three grand left over (maybe less, since you're in Canada). Either setup would be a
mighty nice home theater.