I have been looking around for an answer to this but can't see anything that clearly answers my question. My ps3 when it plays a dvd, automatically upscales from 576p to720pp/1080i on my tv, so the DVD looks sharp, if not a little sharper than it would with with a standard dvd player. However it does not do this with Mp4 files at 576p, whilst the file fills the screen it is just expanded, and so loses that crisp edge. Does an Apple TV upscale these to 720p/1080i/1080p etc the same as a blu-ray player would with a dvd. Or is a limitiation of the file type/encoding quality? On my computer screen in the correct window size (576 pixels high) it is dvd quality. I would happily buy an Apple Tv if it upscales.