The Samsung HD931 is one option that scales, but there are more. www.avsforum.com
has a ton of suggestions for DVD players that will scale normal DVD's to 1080i through DVI or Component inputs. The only issue is Macrovision (MV).
Start here. This is a very comprehensive thread about all the 1080i options out there. Ways to hack past MV, with certian players. But for 100-300$ you can get one of these, which is basically a cheap DVD player with next generation performance. Favorably compared to many HTPC's out there. One of these babies and a DVD-Burner will allow you to watch all your movie in HighDef. Here are the brands discussed (ebay is the best place to find these players).
The key being a Sigma 8500 machine, which is what does the 1080i up conversion. Good luck though. I personally just bought a Dreamx ($127 shipped), and if you can wait a few days I'll hook it up to my Sony Projector and compare the differences between it and the $800 Pioneer Elite Prog-Scan (PS) player I've currently got. Just e-mail me and I'll keep you in the loop. I just figured that for $125 bucks I can use this as a bedroom machine or CD-Player if it's crap. It also plays MPEG-4 video (Tivo compresion) so if you download a bunch of DIVX movies this is a great option, you can burn them on CD and watch in close to DVD quality.