My TV is XBR1. I think I read that the XBR2 does a much better job of upconverting SD programming. If so, I can see the difference. Likewise with my DVD player. Letting it convert 480p to 1080i is better than sending 480p to my TV and letting it upconvert. I have seen very little difference with 720p versus the HR20 doing the converting to 1080i but I figure there must be some as there would be two conversions going on (720p to 1080i then a deinterlacing), so I live with the transition for 720p.