A good upconverting player probably would be a positive change (especially with an older projector that may not have as good an internal scaler as some newer displays offer), and the OPPO players are certainly high on the list of good upconverting players. The one catch is whether the projector's DVI input is HDCP compliant - if it is, then the 981HD would be a good choice, but if it isn't you'd need to go with the 971H (which doesn't include HDCP, allowing it to work with older displays that lack HDCP compliance). I couldn't find anything that indicated either way, but your manual probably says. Both players use the Faroudja chip, so you'll need to make sure you calibrate carefully with a DLP because of the Faroudja chip's tendency to highlight macroblocking.

An HDMI or DVI source (for your purposes it doesn't matter which, the video signal is the same with either) will support a digital signal path from disc to DLP - which is in itself digital, so you avoid any D/A conversion. With a 45 foot video cable, you want to get a good one - that's at the upper limit of the cable length supported by the format, so you don't want a cheap one that won't work.