If iTunes supplies SD movies in the same resolution than a old DVD movie, then I'd be very surprised if you can see any difference on the iPads screen.
In letterbox mode, which I'd imagine is what people would normally use as otherwise you lose what's either side of the screen, you only get a resolution of 1024x575 to watch a 16:9 screen, and many films are narrower, less vertical pixels than that.
A NTSC DVD resolution is 720x480
A PAL DVD resolution is 720 x 576
So there's not a bad match for a standard old DVD to fit perfectly.
I don't think there are really enough dots to appreciate the difference on the iPad.
Of course, if we assume the iPad will at some point get a better screen then your HD purchase could be enjoyed at it's proper res/detail
You may have to wait a few years though
