I have a latest generation Mac mini, bought last year, connected to a Kuro 50" screen with a DVI-to-HDMI cable.
The Mac mini is set to output its native resolution to the Kuro, 1360x768.
The upscaling from DVDs, either played straight from the optical drive or ripped to harddisk, is simply formidable. The quality is outstanding, and I haven't found any upscaling players that go better than what I'm getting from this combination. I'm also tapping the audio via optical toslink to a receiver, and get dts 5.1, 5.1 dolby digital and pcm stereo out with no problems.
Until I saw this, I thought I would need a stand-alone DVD-player. So far I haven't bothered to get one.
One negative - the optical drive is noisy compared to that of a cd or dvd player, which is why I prefer ripping the movies to harddisk. In low volume portions of a film you can hear the disk spinning on some movies, not all. But I'm controlling my Mac mini with a bluetooth keyboard, or with screen sharing from my laptop, and will be putting it inside a cabinet, that should take care of the low hiss from the drive.
Also, the Mini doesn't decode SACD or any of the high-resolution audio formats.